GST on Commercial Property Purchase?

From: Manny B

Howdy there,

I had a look at a good Commercial Property which may be worth considering (good return in good area)... but the agent did state that I would be up for 10% GST on the purchase price... is that right?

The agent thinks if I form a business & purchase it under a business name that I would get the GST re-imbursed... is that the case? also, if the Commercial Property is put into a family trust, would it also get back the GST as if purchased under a business name?

Any information would be greatly appreciated (till I talk to my accountant)... thanx in advance...

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Reply: 1
From: Dale Gatherum-Goss

Hi Manny!

Yes, I believe the real estate agent was right on both counts. And, yes, if you buy the property through your family trust (assuming that it is registered to collect GST) then you can claim back the GST on your next BAS.

I wish it were that simple though.

If the vendor is selling under the margin scheme, and so no GST is paid except on the margin between the value of the property at June 30, 2000 and it's sale price now.

Furthermore, you can both agree in writing that you are buying the commercial property as a "going concern" and that therefore Section 38-325 applies.

As you can see, this is a complex area and you would do well to get specific advice from your accountant and solicitor before signing the contract.

I hope that this helps

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Reply: 1.1
From: Manny B

Hi Dale,

thanx for the advice/tip... I will chase up my accountant & solicitor to investigate it further... if anything comes out of it, I will pass on the details/advice I gained on this forum for others to use as a rough guide...


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