When to register for ABN and GST for commercial property?

Hi all,

Hubby and I are looking to purchase a commercial property and would like some advice on when we need to register for ABN and GST in a sole trader capacity in order to recover the GST from the purchase.

We tried doing it online and it came back saying that we are not currently eligible for an ABN as we do not currently have a business in operation.

As we are very keen to recover the gst from the purchase, we would appreciate any assistance in advising us what we need to do. Is the process to apply for ABN and GST after we exchange contracts but before we settle or are we suppose to have it all sorted prior to exchange?

Thanks in advance,

B
 
Hi,

Investments in commercial properties require to be registered for GST, as GST received on your rent needs to be reported to the ATO (and expenses of course)

You may wish to check that your contract includes GST.

I believe you need to be registered for GST at the time of exchange, as that is the contract start date for tax purposes.

In terms of applying for abn via abr.gov.au - it may come up with an error but if you are sure you have entered the right yes and no's - click 'Submit'. The ABR site is a bit strange this week but works as it should on 'Submit'.



Please note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice
 
Hi all,

Hubby and I are looking to purchase a commercial property and would like some advice on when we need to register for ABN and GST in a sole trader capacity in order to recover the GST from the purchase.

Thanks in advance,

B

You may also want to consider some sort of structure in which to hold the commercial property.

My understanding is that if you have resi ip's and commercial in same entity then there are problems as the whole gst claiming can get muddled.

Cheers
 
Hi Alpina,

You can always backdate ABN and GST registration on the ABR website. The back dating for ABN and GST registration is a common one as on the flip side clients are always failing to pay the GST portion on the sale of commercial property or business exchanges. This is largely due to the complicated GST legislation that governs various GST transactions.

You must have filled out the form online incorrectly online, as in your situation you are certainly eligible for registration of both ABN and GST.

Just another quick point of clarification. Even though the property is commercial in nature - this does not make it compulsory to register for GST. GST is still only compulsory once your income reaches $75,000. If it was compulsory to register for GST in every commercial arrangement, this would be a nightmare for a lot of SMSFunds as we have plenty who hold property in partnership.

Hope this helps, cheers.
 
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