sharetrader
Page 2 of 3 FirstFirst 123 LastLast
Results 11 to 20 of 30
  1. #11
    Legend
    Join Date
    Apr 2008
    Location
    Sth Island. New Zealand.
    Posts
    6,428

    Default

    Quote Originally Posted by JBmurc View Post
    yeah the income from the mixed commercial property is under 60k p.a ...still it looks like it will be closer to 70-80k with a garage turning into another tenantable space.... so will have to be registered .....so would I be right if the current owner isn't GST reg...that if it brought is then registered for GST on the likely higher income I could then claim 15% of the total value paid for the property ???
    If you have those details correct, then yes. But you would not be buying it zero rated. (That means GST is included but at zero percent and it's simply a mechanism to avoid one party paying and the other claiming it which is normal practise, but exceptions exist with buildings and going concerns to avoid this with large sums of money bouncing around unnecessarily) You would just buy it inclusive of GST as you are going to claim that GST.
    That is how it was last time I was involved with a similar transaction and I'm not aware of any changes, although I'm no longer daily hands on with such things, but ring the IRD, GST dept. - you do not need to identify yourself - and flick it past them.

    This will tell you more:
    http://www.prlaw.co.nz/article/83/11...-Transactions/

    'The Vendor can’t say the Purchase price is “Plus GST (if any)” because he is not registered. So the Purchase price will be “Inclusive of GST (if any)”. And the Purchaser will be able to claim the GST in his next GST return.'

    P.S Be aware that if you register and claim then you will have to pay GST on rent received. You may be able to increase rentals by the GST which tenants can claim back if registered.
    Last edited by fungus pudding; 30-03-2016 at 01:28 PM.

  2. #12
    Guru
    Join Date
    Nov 2013
    Posts
    3,025

    Default

    There is now complusory zero rating on all land transactions (too many dodgy developers) so the sale of the property will be zero rated anyway - you wont be charged GST and you wont be able to claim it back.

    if your rents are above $60k, then you need to register.

    If you do registered your share trading company, the GST position might get a bit confusing as you will have mixed supply (ie. rental is GST supply but share trading is an exempt supply) so your GST claims for expenses shouldn't be for the whole amount. Not exactly sure how it works but sounds complicated.

  3. #13
    Legend
    Join Date
    Apr 2008
    Location
    Sth Island. New Zealand.
    Posts
    6,428

    Default

    Quote Originally Posted by Harvey Specter View Post
    There is now complusory zero rating on all land transactions (too many dodgy developers) so the sale of the property will be zero rated anyway - you wont be charged GST and you wont be able to claim it back.

    if your rents are above $60k, then you need to register.

    If you do registered your share trading company, the GST position might get a bit confusing as you will have mixed supply (ie. rental is GST supply but share trading is an exempt supply) so your GST claims for expenses shouldn't be for the whole amount. Not exactly sure how it works but sounds complicated.
    I'm not up to date on this, but I though zero rating became compulsory if the transactions were between two registered parties.


    Scroll to What if the Vendor is not GST-registered but the Purchaser is?

    http://www.prlaw.co.nz/article/83/11...-Transactions/

    'The Vendor can’t say the Purchase price is “Plus GST (if any)” because he is not registered. So the Purchase price will be “Inclusive of GST (if any)”. And the Purchaser will be able to claim the GST in his next GST return.'
    Last edited by fungus pudding; 30-03-2016 at 01:05 PM.

  4. #14
    FEAR n GREED JBmurc's Avatar
    Join Date
    Sep 2002
    Location
    Central Otago
    Posts
    8,477

    Default

    Quote Originally Posted by Harvey Specter View Post
    There is now complusory zero rating on all land transactions (too many dodgy developers) so the sale of the property will be zero rated anyway - you wont be charged GST and you wont be able to claim it back.

    if your rents are above $60k, then you need to register.

    If you do registered your share trading company, the GST position might get a bit confusing as you will have mixed supply (ie. rental is GST supply but share trading is an exempt supply) so your GST claims for expenses shouldn't be for the whole amount. Not exactly sure how it works but sounds complicated.
    Yes I agree round the mix with the Share trading company does look complicated...personal I think it would average under 60k if you didn't
    load up the flat ....so would work best ...non GST paying
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

  5. #15
    Legend
    Join Date
    Apr 2008
    Location
    Sth Island. New Zealand.
    Posts
    6,428

    Default

    Quote Originally Posted by JBmurc View Post
    Yes I agree round the mix with the Share trading company does look complicated...personal I think it would average under 60k if you didn't
    load up the flat ....so would work best ...non GST paying
    Except registering would give you back approx. 13% of the purchase price and leaves you free to increase the rent. And I presume you could GST register in your own name so to avoid confusion with company. Not sure what you mean by load up the flat.

  6. #16
    Guru
    Join Date
    Nov 2013
    Posts
    3,025

    Default

    Quote Originally Posted by fungus pudding View Post
    Except registering would give you back approx. 13% of the purchase price .
    except compulsory zero rating on property purchases. Been in a few years.

  7. #17
    Legend
    Join Date
    Apr 2008
    Location
    Sth Island. New Zealand.
    Posts
    6,428

    Default

    Quote Originally Posted by Harvey Specter View Post
    except compulsory zero rating on property purchases. Been in a few years.
    The changes a few years ago (2011)make it compulsory to zero rate between 2 registered parties. A non registered vendor cannot zero rate. He or she sells inclusive of gst and the purchaser can claim it back. I posted links after your previous post. Plenty of info online about the changes.

  8. #18
    FEAR n GREED JBmurc's Avatar
    Join Date
    Sep 2002
    Location
    Central Otago
    Posts
    8,477

    Default

    Yes for sure guess you have to weigh up the different options.... GST reg will mean a lot more accountant costs , also be paying 15% more tax on my nett profit p.a ? then when I go to sell I'd be paying 15% extra tax ?

    Also if I just purchased for rental income (sub 60k) wouldn't I also not have to pay any Capital Gains tax say in 10-15yrs time ..where if I buy reg GST ...I'd be paying TAX+GST ....

    will certainly be going over with the accountant before any offers

    p.s ....loading the flat up ...the current owner has like 10 tenants in the small 4bed unit...
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

  9. #19
    Legend
    Join Date
    Apr 2008
    Location
    Sth Island. New Zealand.
    Posts
    6,428

    Default

    Quote Originally Posted by JBmurc View Post
    Yes for sure guess you have to weigh up the different options.... GST reg will mean a lot more accountant costs , also be paying 15% more tax on my nett profit p.a ? then when I go to sell I'd be paying 15% extra tax ?

    Also if I just purchased for rental income (sub 60k) wouldn't I also not have to pay any Capital Gains tax say in 10-15yrs time ..where if I buy reg GST ...I'd be paying TAX+GST ....

    will certainly be going over with the accountant before any offers

    p.s ....loading the flat up ...the current owner has like 10 tenants in the small 4bed unit...
    Yes. You need to talk to your accountant. GST does not change the tax on your net profit, and won't change the net profit either if you can add GST to the rent, which the tenants claim back anyway so is probably no increase to them. Depends on the current situation and their GST status. From what I understand from your details there could well be an advantage in registering. 13% refund from first GST return for one.
    We do not have a capital gains tax, but sometimes income tax is payable on capital gained. Whether you are GST registered or not is irrelevant to any tax on sale - it depends on intent at time of purchase. The 10 or 15 years doesn't come into it. If you buy and intend to sell in 100 years your capital gained is taxable, but if you haven't blatantly traded and sell because of a change in circumstances you almost certainly will not be taxed.

  10. #20
    FEAR n GREED JBmurc's Avatar
    Join Date
    Sep 2002
    Location
    Central Otago
    Posts
    8,477

    Default

    right many thanks
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •