gst on purchases

[graisme]

hi
can anyone tell me if gst is payable on the purchase of a sevenplex of resi units, as the tenants are resi but it is a commercial purchase?

also, can someone please explain in monosyllables, about buying a commercial property as a going concern and avoiding the payment of gst? eg a medical practise with practising doctors, is this a "going concern?"

if, assuming that gst is payable on both, you are registered for gst, can you then claim back the gst after purchase?

thanks all in anticipation

 

[Player]

Hi Grace,

even though you are likely to attract finance at a commercial LVR (unless thay are all strata and you can use different lenders to keep resi LVR), I would not envisage that GST is payable unless they are new or even second hand (less than five years old.)

If they are new (or less than five years old), the seller would likely have to charge GST and so you will pay, however you would register for GST and receive that back anyway.,

With CIP (as I understand it), a going concern would be an established business that has some time left on the lease. It is a grey area. If the medical clinic was sold (not by the doctors) with say a three, four or five year lease and even better with options this would likely constitute a going concern. If however they are selling with a 6 month lease remaining (+/- option period), then in the eyes of the ATO, this may not be seen as a going concern. Also, my understanding is that if you buy off the vendor as a lease back, this also is not considered a going concern. A vacant possession purchase will also attract GST.

Even if you purchase a CIP as a going concern you would need to register for GST if the value of the supply/rents of commercial premises in a 12 month period would be more than $50,000............or ?? not sure if this has been adjusted to a higher threshold.

I may be mistaken, however that is my understanding. There was thread somewhere about similar questions, however I cannot seem to find it.

Finally, yes, if you register for GST, in either scenario, you will claim back the GST, however you also have the onus of ongoing BAS statements and lodgement. The upside is you get to claim GST back on any subsequent service providers, repairs or good purchased for those investments.

 

[Propertunity]

... you would need to register for GST if the value of the supply/rents of commercial premises in a 12 month period would be more than $50,000............or ?? not sure if this has been adjusted to a higher threshold.

Your suspicions were right, it has been adjusted up to $75K.