When is the GST paid on a Commercial Property?

[joyoboyo]

Hi again

We are looking at buying a commercial office at auction next month. The successful purchaser needs to pay 10% GST on the sale price.

I understand we have to pay a deposit on the day should we win the auction but my question is at what stage of the buying process is the GST paid. ie. When do I need to ensure funds are ready for the GST component to be paid, on settlement or before?

It may seem a silly question but I have the feeling we need to pay this separately.

Can anyone correct me or point me in the right direction.

Regards

J

 

[HotRod]

Would have thought everything you pay has a GST component.

You pay a $110000 deposit, they'll be a $10K GST component.

When you come to pay the $770000 balance, they'll be a $70K GST component.

 

[Aaron_C]

Just don't forget that if you are registered for GST you can claim it back in the next BAS.

 

[HotRod]

Just don't forget that if you are registered for GST you can claim it back in the next BAS.

Was about to edit that in.

But he then has to remit the GST for the rent back (off set against other GST expenses).

Also, he'll probably pay GST on his BAS on the sale.

 

[joyoboyo]

Just don't forget that if you are registered for GST you can claim it back in the next BAS.

Yep understood. We operate under a trust structure with our business and we will be buying it in the Trust name. An issue I am having with the bank in order to be able to successfully claim the GST is getting them to supply the documents with the correct details on.

The pre approval docs have been provided to me with the name of the Trustee company as the borrower which is correct but it needs to reference that this company is the trustee for the trust and we need to use the ABN of the actual trust and not Trustee company if we are to claim back GST.

THe trust is registered for GST and not the Trustee company. Explaining this to the bank is driving me nuts.. they just don't get it.

J

 

[Terry_w]

Yep understood. We operate under a trust structure with our business and we will be buying it in the Trust name. An issue I am having with the bank in order to be able to successfully claim the GST is getting them to supply the documents with the correct details on.

The pre approval docs have been provided to me with the name of the Trustee company as the borrower which is correct but it needs to reference that this company is the trustee for the trust and we need to use the ABN of the actual trust and not Trustee company if we are to claim back GST.

THe trust is registered for GST and not the Trustee company. Explaining this to the bank is driving me nuts.. they just don't get it.

J

Why on earth would you be buying a property in a trustee company that trades? If the business fails you will lose the property.