SearchGST for commercial rental
Lee asks:
(updated on Monday, August 01st 2016)
I am looking at a building that I would propose to have as a mixture of commercial and residential rental.
How would the income be assessed for GST? Would the commercial be GST and the residential No GST? And then - what about the outgoings re rates and repairs, etc in terms of GST claims?
Our Experts Answer:
Section 5(15) of the GST Act says that where a supply includes a dwelling this is a separate supply. This essentially means the commercial portion can be subject to GST as a taxable supply and potentially compulsory zero rating, but that the supply of the dwelling is an exempt supply.
When acquiring a property like this it is therefore wise to negotiate the split between the two supplies with the vendor and ensure the tax invoice issued reflects this split. This then will form the basis for apportionment of costs on the property. And, yes, you would need to apportion all between taxable and exempt and only seek to recover GST to the extent that the cost related to the taxable commercial use.
Be careful also to ensure that the standard warranty in the agreement has the vendor confirm that the supply of the dwelling is not a supply to which GST applies.
Most Read
| AIA - Go Home Loans | 4.00 |
| Unity First Home Buyer special | 4.15 |
| SBS FirstHome Combo | 4.29 |
| ICBC | 4.49 |
| Kainga Ora | 4.59 |
| SBS Bank Special | 4.69 |
| Unity Special | 4.80 |
| China Construction Bank | 4.85 |
| Co-operative Bank - First Home Special | 4.89 |
| Co-operative Bank - Owner Occ | 4.99 |
| ASB Bank | 4.99 |
| China Construction Bank | 4.95 |
| Kainga Ora | 4.95 |
| ICBC | 4.99 |
| SBS Bank Special | 5.29 |
| Unity Special | 5.29 |
| Westpac Special | 5.29 |
| Co-operative Bank - First Home Special | 5.29 |
| ANZ Special | 5.35 |
| ASB Bank | 5.35 |
| BNZ - Std | 5.35 |
| AIA - Go Home Loans | 5.35 |
| SBS Bank Special | 5.49 |
| ICBC | 5.65 |
| Kainga Ora | 5.69 |
| ASB Bank | 5.75 |
| BNZ - Std | 5.75 |
| AIA - Go Home Loans | 5.75 |
| Westpac Special | 5.75 |
| Kiwibank Special | 5.89 |
| Co-operative Bank - First Home Special | 5.89 |
| TSB Special | 5.99 |
| China Construction Bank | 5.99 |
| SBS FirstHome Combo | 3.29 |
| AIA - Back My Build | 3.34 |
| SBS Construction lending for FHB | 3.79 |
| CFML 321 Loans | 4.20 |
| ICBC | 5.39 |
| Co-operative Bank - Owner Occ | 5.69 |
| Co-operative Bank - Standard | 5.69 |
| Kainga Ora | 5.79 |
| Pepper Money Prime | 5.99 |
| Unity Standard | 6.04 |
| Unity Special | 6.04 |
