GST refund??

From: Gee Vee


Has anyone having built a new IP, registered for GST and been able to claim back the GST paid on building costs? How does this work? OR does it work? What is the down side to doing this?
 
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Reply: 1
From: Dale Gatherum-Goss


Hi

I haven't done it myself, but, I have prepared the BAS for people who do this.

If you have given the tax office your details, you will have a refund cheque deposited directly into your bank account within a fortnight of lodging your BAS.

The downside, of course, is that you will give the tax office 10% of your sale price when you sell the development.

Does this help

Dale
 
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Reply: 2
From: Glenn Mott


Dale,

Would this mean that if you kept the said properties, you would have to give 10% of your rent to the govt for gst?

Glenn
 
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Reply: 2.1
From: Dale Gatherum-Goss


Hi Glenn

No. Two different areas and issues involved. I have a manual of seminar notes that took the best part of 230 pages to explain the distinctions . . . it's not funny!!!

Have fun

Dale
 
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Reply: 2.1.1
From: Owen .


So if you claim GST input credits via BAS, then sell the development and you are up for 10% GST payable to the ATO. Are you also up for CGT? Does one exclude the other?

Owen

"Gambling promises the poor what property performs for the rich – something for nothing"
 
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Reply: 2.1.1.1
From: Dale Gatherum-Goss


Hi Owen

No, unfortunately. They are 2 very different issues indeed.

The GST is 1/11th of the sale price or less if you use the margin scheme, whereas, the CGT is based on the differences between the purchase price and the sale price.

Have I created even more confusion with this answer? I hope not.

Have fun

Dale
 
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Reply: 2.1.1.1.1
From: Owen .


No confusion Dale. I just wasn't sure if the GST was additional to CGT or not. You cleared it up for me.

Thanks.

Owen

"Gambling promises the poor what property performs for the rich – something for nothing"
 
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Reply: 2.1.1.1.1.1
From: Ctrader .


As a GST Registered Investor, when you purchase from a Developer who is also registered can you claim back the GST content of the purchase price?

Also, although GST is not charged on residential rent, being GST registered, can you claim back GST on any expenses?

Secondhand residential property does not normally attract GST when sold but what if you are a registered vendor?

What happens if you no longer want to be registered for GST but you want to keep assets purchased while registered?
 
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Reply: 2.1.1.1.1.1.1
From: Dale Gatherum-Goss


Hi Ctrader!

>As a GST Registered Investor,
>when you purchase from a
>Developer who is also
>registered can you claim back
>the GST content of the
>purchase price?

It depends upon so many factors, I'm afraid that I can't answer this properly here. Residential house? Commercial house? Property sold under the margin scheme? Under the "going concern" rules?

>Also, although GST is not
>charged on residential rent,
>being GST registered, can you
>claim back GST on any
>expenses?

No, you cannot.


>Secondhand residential
>property does not normally
>attract GST when sold but what
>if you are a registered
>vendor?
>

No, unless you have created a new asset somehow in which case you would.


>What happens if you no longer
>want to be registered for GST
>but you want to keep assets
>purchased while registered?


You can deregister easily enough. It does not affect your assets although you may need to reregister depending upon what you do again in the future.

I'm sorry for being vague. The GST is an enormous issue with more questions, twists and turns than answers.

Dale
 
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Reply: 2.1.1.1.1.1.1.1
From: Ctrader .


Thanks Dale,
My understanding is that if a Developer builds a new residential property ( not built under margin scheme as input tax credits cannot be claimed ), GST has to be charged. If this is so and the purchaser is registered for GST, then the purchaser should be able to claim back the GST content? When the purchaser then decides to sell the property later on they must then also pay to the ATO the GST on the sale price. But you have said that secondhand residential property does not attract GST. This would mean that the purchaser gets a GST refund on purchase buy does not pay on resale. This effectively reduces the purchase cost. What am I missing? Also this would apply if the purchaser de-registered before selling. I don't see the ATO paying out without getting something back at some point.

My head hurts.
 
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Reply: 2.1.1.1.1.1.1.1.1
From: Dale Gatherum-Goss


Hi!

Welcome to my world!!!! And you guys wonder why i don't sleep. I'm afraid to!!

Seriously, I'll try again . . .

>My understanding is that if a
>Developer builds a new
>residential property ( not
>built under margin scheme as
>input tax credits cannot be
>claimed ),

The developer buys land. The purchase price may or may not include GST depending upon the vendor.

If the vendor elects to use the margin scheme, the purchase will include a lower amount of input credits available to the purchaser to claim back from the tax office in his BAS.

Normally, when the developer sells that property, it is deemed a new property and he will sell it inclusive of GST.

If the Developer bought the land without there being GST in the price, or he bought it before GST came into play (ie, before June 2000) then the developer can elect to use the margin scheme to reduce the amount of GST that is included in the sale to Joe Public.

If this is so and the
>purchaser is registered for
>GST, then the purchaser should
>be able to claim back the GST
>content?

Depends upon who is the purchaser here. If it is Joe Public and he will use the house for a rental property. No he cannot claim back the GST, even if he is registered.

Did I understand your question properly?

.When the purchaser then decides to sell the
>property later on they must
>then also pay to the ATO the
>GST on the sale price.


If the purchaser sells a house that has been sold previously, then there is no GST included in the sale.


>But you >have said that secondhand
>residential property does not
>attract GST.

That is correct, see above. Unless (and don't you just hate that!) you have somehow created a new property out of the old property through a substantial renovation or perhaps even a sub-division or strata title according to the tax office.

This would mean that the purchaser gets a GST
>refund on purchase buy does
>not pay on resale. This
>effectively reduces the
>purchase cost. What am I
>missing?

See my earlier paragraph, this might now be clearer.

Also this would apply if the purchaser de-registered before selling. I don't see
>the ATO paying out without getting something back at some
>point.
>

I'm not sure that I understand you properly. But, I'm hopeful that my earlier para's will make a difference. let me know either way, huh?

Have fun

Dale

>My head hurts.

You need more alcohol or chocolate (see that post a few days ago!!)
 
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Reply: 2.1.1.1.1.1.1.1.1.1
From: .watto .


and this is the easier tax system....that's going to unchain my business...yeah right....

where do i send the invoice for the extra accounting costs...


Cheers
Watto
Melb Freestyler
 
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Reply: 2.1.1.1.1.1.1.1.1.1.1
From: Dale Gatherum-Goss


Hi

I find that Scotch helps a great deal. I think that Scotland's exports have increased quite a bit over the last two years.

Hic

Have fun

Dale
 
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