Hello mitta
Your question related to the registration of an Australian Business Number for the purposes of applying for a low doc loan.
Most lenders require two concurrent years registration, however there are some lenders which will take twelve months and others which will accept one day's registration. There are also lenders which require no ABN to be registered.
However, if the amount you wish to borrow would require an income of more than $50,000, and you are claiming only the one business activity, then you would need to be registered for GST at the time of making the application.
This is because it is compulsory to be registered for GST if you income from non-PAYG income is more than $50,000 per annum from that business activity.
So if you were declaring an income of, say, $80,000 per annum but were not registered for GST the lender would be cautious about accepting your statement of earnings.
However, one of my customers had two differenct ABN and was not registered for GST. The lender did accept a combined income of $90,000 on the basis that neither business activity grossed more than $50,000 per annum and was not therefore required to be registered for GST even though combined gross business income was above the registration threshold.
Regarding your subsequent question regarding residential rental, to the best of my knowledge GST is treated as input taxed supply with residential property and therefore there is no requirement to be registered for GST with specific regard to this income.
Equally, the ATO has previously advised me that there is no requirement for a landlord of commercial property to be registered for GST if their only non-PAYG income is the collection of rent from commercial property. Again, income and expenses relating to that property can be treated as input taxed unless and until the relevant share of the rent exceeds $50,000 per annum.
This means that the rent could be, say, $99,500 per annum, and the property owned by two people, each of whom receives $49,750 gross rent per annum. This is below the threshold and they would not need to be registered, although they could choose voluntary registration which would enable them to claim tax credits for the whole of the GSt on expenditure relating to the property.
Input tax credits are only rebated at your highest marginal tax rate, not the full amount of the GST rebated through the BAS system. If the property had a high level of operating expense paid for by the owner it may be financially advantageous to register for GST.
You could reactivate your previous ABN but it would depend on the individual lender whether or not they would accept your explanation regarding the interruption to business activity.
Hope this helps
Kristine
