claiming gst
- Thread starter steve
- Start date
"Claimed back"- it depends on what you mean.
If you are a private individual, it can be claimed against your income tax- an expense of the property. You will receive 50% of the management fee, including GST.
If you are a business, registered for GST, I believe you can claim the entire cost of GST against GST payable- as long as you earn more from GST than you pay.
The amounts are small- say 10% GST on 7% of rent- say $400 pw, that's $2.80 pw.
If you are a private individual, it can be claimed against your income tax- an expense of the property. You will receive 50% of the management fee, including GST.
If you are a business, registered for GST, I believe you can claim the entire cost of GST against GST payable- as long as you earn more from GST than you pay.
The amounts are small- say 10% GST on 7% of rent- say $400 pw, that's $2.80 pw.
Hi GW
You can't claim resi GST as a business as it is an input taxed supply
You can on commercial property
You can make a GST loss and get a refund.....been there done that lol.
Since all the GST on commercial gets refunded you have to think what was the point in making it have GST to start with
bundy
Yeah but Bundy
Rental on the supply of commercial premises will or will not attract GST depending on the status of the landlord.
So we're back to the cooked chook!
Geoff
Supply of residental premises is not generally considered a taxable supply. However, the fee charged by the agent is a taxable supply if the agency authority commenced after 11th December, 1999 (please correct me on the date), or the landlord being registered for GST in the course of their (other) business, with the landlord being the end user of the agency services.
If the landlord has a pre-existing authority in place, there is a five (???) year amnesty before that landlord has to pay GST on the agency fees.
Aaaarrrrgh gurgle gurgle (sounds of me eating a non-taxable supply cooked chook from a non-registered supplier)
Input taxed means the GST inclusive acquisitions made in the course of creating a non-taxable supply (in pre GST parlance this means purchases and sales) where the gross cost of the acquisition is deductable against income
And Geoff - I'd love to be earning more than $60,001 taxable income in order to be able to see a maximum 48.5% benefit on deductions.
It is much better to be registered for GST and to claim the full $GST back as cash flow, than to only get the $GST back at your marginal rate (which in my case might be $0.17 in the dollar if I don't have any property sales actually settled within this financial year.
Where an imbalance can occur is when only a small quantity of taxed acquisitions are needed to manufacture a taxable supply, eg $0.55 worth of materials ($0.05GST) is used to create a taxed supply which sells for $2.32 (of which $0.21 is payable as tax)
As a renovator the acquisition is not generally taxable, the materials and labour are taxable, and the supply is taxable on the margin. So there is a constant ebb and flow of GST.
As a retailer I was quite comfortable with the old sales tax system.
Clothing and 'essentials' were not taxed
Various general items were taxed at 11% from the wholesaler
Books, clothing accessorieswere taxed at 22%
Jewellry & cosmetics were taxed at 33%.
If the GST was introduced to stamp out the black money economy, I have to say the 'cash in hand' operators now do most of their trade in cash, as they use the lure of 'you won't have to pay GST and I can give you a 10% discount' to householders who then lose all consumer protection as the transaction simply doesn't exist.
Life would be a lot simpler if we had stayed in the trees. But then again, perhaps we would now have a banana tax, mango tax and vine tax. Or like the farmers in the irrigation districts, a rain tax.
Off to have a cup of tea, a Bex and a good lie down!
Kristine
Rental on the supply of commercial premises will or will not attract GST depending on the status of the landlord.
So we're back to the cooked chook!
Geoff
Supply of residental premises is not generally considered a taxable supply. However, the fee charged by the agent is a taxable supply if the agency authority commenced after 11th December, 1999 (please correct me on the date), or the landlord being registered for GST in the course of their (other) business, with the landlord being the end user of the agency services.
If the landlord has a pre-existing authority in place, there is a five (???) year amnesty before that landlord has to pay GST on the agency fees.
Aaaarrrrgh gurgle gurgle (sounds of me eating a non-taxable supply cooked chook from a non-registered supplier)
Input taxed means the GST inclusive acquisitions made in the course of creating a non-taxable supply (in pre GST parlance this means purchases and sales) where the gross cost of the acquisition is deductable against income
And Geoff - I'd love to be earning more than $60,001 taxable income in order to be able to see a maximum 48.5% benefit on deductions.
It is much better to be registered for GST and to claim the full $GST back as cash flow, than to only get the $GST back at your marginal rate (which in my case might be $0.17 in the dollar if I don't have any property sales actually settled within this financial year.
Where an imbalance can occur is when only a small quantity of taxed acquisitions are needed to manufacture a taxable supply, eg $0.55 worth of materials ($0.05GST) is used to create a taxed supply which sells for $2.32 (of which $0.21 is payable as tax)
As a renovator the acquisition is not generally taxable, the materials and labour are taxable, and the supply is taxable on the margin. So there is a constant ebb and flow of GST.
As a retailer I was quite comfortable with the old sales tax system.
Clothing and 'essentials' were not taxed
Various general items were taxed at 11% from the wholesaler
Books, clothing accessorieswere taxed at 22%
Jewellry & cosmetics were taxed at 33%.
If the GST was introduced to stamp out the black money economy, I have to say the 'cash in hand' operators now do most of their trade in cash, as they use the lure of 'you won't have to pay GST and I can give you a 10% discount' to householders who then lose all consumer protection as the transaction simply doesn't exist.
Life would be a lot simpler if we had stayed in the trees. But then again, perhaps we would now have a banana tax, mango tax and vine tax. Or like the farmers in the irrigation districts, a rain tax.
Off to have a cup of tea, a Bex and a good lie down!
Kristine
Originally posted by geoffw
Um, I don't understand. Can you expand on this? (it would be useful to more people than just me, I think).OK. Sorry, I've based some understanding of the Oz system on what I went through on the Brit system. I thought I understood it - now I don't
I will stick to what I know
There is no GST on house rents so they are input taxed. So your costs that include GST are not claimable via BAS and are claimed on your tax return and reduce your income.
Bank account fees are also free of GST so the above applies.
Loan fees do have GST.... can't be clamied on BAS for residential but can be for commercial giving you 10% cash back that 1/4.
Commercial property can be purchased GST free as a going concern if there is a tenant in place. Empty you pay the 10% then claim it back, not use the margin scheme as in residential.
You can claim GST on phone bills, office supplies etc based on your usage for business/personal use....I do mostly a 50/50 split or 100% giving me 5% - 10% cash back.......it all adds up.
When your on the top tax rates it doesn't matter as much how you claim compared to someone who only gets 15-30% of it back.
Investor could explain the medical side of GST I think he claims it all back but charges none to the customers.
bundy
Hi
Under 50K it is optional. Treatment of residential IP's is differant than commercial ones by the ATO. Buy one commercial IP and they say your in business but with residential they are more flexiable.
For someone who does buy and hold of residential property there is no GST claimable so there is just extra paperwork each 1/4 to do. If you was going to be a reno/developer and sell the finished house then you would have some claims to make it worth the effort.
Installment Activity Statement might be needed if your buy and holds are above a certain profit level that replaced provisional tax when GST started. I did 2 of those in 2000 before they raised the investment income level.
bundy
