New build & gst

[syko]

hi
gonna start building a new house as an investment and won't be selling, can all gst be claimed back? please note build will be done under Owner Builder.

1. If GST can be claimed back would the loans be set up as investment I/o only?
2. What structure would need to be used?
3. If property is sold down the track i would need to pay gst correct?

 

[Terry_w]

no you can't claim GST

 

[syko]

no you can't claim GST

Why not?

People seem to be claiming back gst when doing a development with multi units? I.e gst paid on building contract?

 

[Scott No Mates]

You are the end user and it is residential so it is input taxed.

If you build and sell then you offset the gst paid from gst collected on the sale (or 1/11 of the sales price).

 

[Ausprop]

People seem to be claiming back gst when doing a development with multi units? I.e gst paid on building contract?

and then all that and more is paid back when they sell. And if they don't sell they pay it back within set timeframes.

seriously do you think the govt would just let you claim back all the GST and then wander off into the sunset?

 

[syko]

and then all that and more is paid back when they sell. And if they don't sell they pay it back within set timeframes.

what happens when your development doesn't make money in the end?

 

[Scott No Mates]

GST is a separate issue to P&L.

 

[Ausprop]

yes and depends on the extent of the loss, GST liability ranks with other unsecured creditors, so if the losses are bad yet you can still clear your mortgages you can spend the money to put the company into liquidation, otherwise the ATO might save you the expense and do it for you

 

[Paul@PFI]

what happens when your development doesn't make money in the end?

But you aren't selling ??

You may actually not be entitled to an ABN if your intention is to retain and rent it. So you may be incapable of claiming GST anyway.

The issues of GST, income tax, CGT are all intertwined. It is a complex area of tax law. Personal advice is a must. This will assist you to plan costs. Planning profit isn't really relevant if you don't sell. To me that's a warning. However in some instances it may. If you sell within 5 years the GST on the sale can still be triggered and can be reduced by the GST on build.