GST on New Property & Private Investors

[Kevmeister]

I was wondering if one purchases a brand new property and has had to pay GST on the purchase, and that property is used for investment purposes, can any form of Input Tax Credit be claimed for the GST component?

 

[Sim]

I would have thought that a private investor would not have been able to claim anything - individuals are generally not registered for GST.

However, if you make a business out of buying property - then one would assume that there may be something that could be done ?

 

[DaleGG]

Originally posted by Kevmeister
I was wondering if one purchases a brand new property and has had to pay GST on the purchase, and that property is used for investment purposes, can any form of Input Tax Credit be claimed for the GST component?

Hi

Unless you are registered for GST as the purchaser, you cannot claim back the gST that you pay. Even then, if the property is a residential property you still cannot claim the GST.

Bummer, huh?

Have fun

Dale

 

[Kevmeister]

Guess it makes sense. The person buying the property is a "consumer" in a sense so whilst the Builder gets to claim (I presume) input tax credits on their GST incurred during construction, the end-purchaser cannot.

I guess the other angle is that an investor buying the property does not charge GST on the rental, so the government wants to make its GST somehow.

 

[bundy1964]

Or in my case I charge the tenants GST, pay it to the ATO less my claims and then the ATO refunds it back to my tenants.

When buying it is GST free is it is tenated as it is the sale of a going concern. If it is empty you can use the margin scheme and pay less GST but can't claim for it or take it as 10% of the total price and claim it all back.

It all makes the old tax exemptions look pretty good now

bundy