Rent + GST... ?

Hi there,

When a tenant pays a landlord rent, do they have to pay 10% GST on top of this rent amount?

So in a net lease the tenant pays the net rent + GST + outgoings?

Do they pay the GST amount direct to the ATO?

When advertised rental values are quoted, are they usually exclusive of the GST amount?

Thanks
 
Hi there,

When a tenant pays a landlord rent, do they have to pay 10% GST on top of this rent amount? What does the lease say, is the landlord registered for GST

So in a net lease the tenant pays the net rent + GST + outgoings? What does the lease say, is the landlord registered for GST

Do they pay the GST amount direct to the ATO? No

When advertised rental values are quoted, are they usually exclusive of the GST amount? I think advertising should either say plus GST or it is inclusive of GST. If it is a small property and the owner has no other reason to be registered for GST it is possible there is no GST

Thanks

Ask for the lease. Don't guess. Don't assume that what is applicable for one lease is applicable to all leases
 
If your turnover is < 75k and you are allowed to be non-registered for GST purposes would this cause any problems for your commercial tenants?

Would there be any instance where they would wish for you as their landlord to be registered for GST?

And - if you are non-registered and you buy a letted commercial IP with a tenant in place - would you get to keep the GST amount if you inherit a lease which has GST included (i.e. rather than having to pay it across to the ATO)? Or would the tenant simply no longer have to continue to pay GST on the rent upon settlement?
 
you can only charge GST if you are registered for GST. doesnt make a difference to most businesses because they would just have to pay that GST to the govt anyway.

you cant keep any tax claimed for your own benefit - so no, they would have to stop paying GST or you would have to register.
 
you can only charge GST if you are registered for GST. doesnt make a difference to most businesses because they would just have to pay that GST to the govt anyway.

you cant keep any tax claimed for your own benefit - so no, they would have to stop paying GST or you would have to register.

Understood, thanks Belu.

A few more basic questions:

- Would a tenant mind if they had to stop paying GST to you? Assume it wouldnt make a difference to them...?

- Are residential rents received and interest earnt included or excluded in the 75k threshold. I.e. if an entity earns 60k in commercial rent, 20k in resi rents, and 10k in interest, would it have an obligation to register?

Thanks!
 
You should always write lease as rent + gst.

The reason is that if you have included it rather than plus than if there is an increase in the gst rate you would need to pay the difference. If its '+' then it will automatically increase.

In relation to resi and com in same structure with gst thrown in the mix. I came across some documentation that led me to believe that things become very complicated in this situation. Unfortunately I can find the details and I didn't give it enough regard at the time to remember much detail. I do have the feeling that it could become a big problem particularly at sale time.

Cheers
 
You should always write lease as rent + gst.

The reason is that if you have included it rather than plus than if there is an increase in the gst rate you would need to pay the difference. If its '+' then it will automatically increase.

Good point, thanks handyandy.
 
In relation to resi and com in same structure with gst thrown in the mix. I came across some documentation that led me to believe that things become very complicated in this situation. Unfortunately I can find the details and I didn't give it enough regard at the time to remember much detail. I do have the feeling that it could become a big problem particularly at sale time.

Cheers

I'm not 100% clear on this either so hopefully someone else can confirm or correct me but the problem I think you are refering to relates to registering for GST as it is a trigger which will effect any future developements held within the structure.

Basically if you own a house that is to be sub divided (and sold) and you register for the GST any capital gains made between registration and when you start the developement will not only be subject to the normal capital gains tax but also GST. So it is best to keep any property that is to be developed and sold in a seperate structure from any other property/ buisness requiring you to register for the GST.
 
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