Commercial

Property problems: When to pay GST on your property purchase

Q. I am considering buying a commercial property as an investment. The vendor is registered for GST and the property has an existing commercial tenant. Will I have to pay GST on the purchase? Will I have to register for GST? Would this GST treatment be different if I purchased a residential rental property? Is there a capital gains tax if I sell the property?

Monday, March 28th 2005

A. As the property is a commercial property and the vendor is registered for GST the sale of the property to you will be a taxable supply. In that case, GST will be either nothing or charged at 12.5 per cent.

GST will be charged at 0 per cent if the commercial property is supplied as a going concern (and the parties agree in writing that it is the supply of a going concern).

It will be a going concern if the commercial property is to be sold subject to the existing tenant. You will also need to register for GST to get the benefit of this zero-rating. You could not claim a GST deduction on the purchase price, if the sale is zero-rated.

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SBS FirstHome Combo	6.74
Heartland Bank - Online	6.89
Wairarapa Building Society	6.95
Unity	6.99
Co-operative Bank - First Home Special	7.04
ICBC	7.05
China Construction Bank	7.09
BNZ - Classic	7.24
ASB Bank	7.24
ANZ Special	7.24
TSB Special	7.24

Unity First Home Buyer special	6.45
Heartland Bank - Online	6.55
SBS Bank Special	6.69
TSB Special	6.75
Westpac Special	6.75
China Construction Bank	6.75
ICBC	6.75
AIA - Go Home Loans	6.75
ASB Bank	6.75
Unity	6.79
Co-operative Bank - Owner Occ	6.79

SBS Bank Special	6.19
ASB Bank	6.39
Westpac Special	6.39
AIA - Go Home Loans	6.39
China Construction Bank	6.40
ICBC	6.49
Kiwibank Special	6.55
BNZ - Classic	6.55
Co-operative Bank - Owner Occ	6.55
TSB Special	6.59
SBS Bank	6.79

SBS FirstHome Combo	6.19
AIA - Back My Build	6.19
ANZ Blueprint to Build	7.39
Credit Union Auckland	7.70
ICBC	7.85
Heartland Bank - Online	7.99
Pepper Money Essential	8.29
Co-operative Bank - Owner Occ	8.40
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First Credit Union Standard	8.50
Kiwibank	8.50