GST on residential rental property

Question from kausalya updated on 27th February 2007:

Hi I want to check this out for a friend. She is buying her first residential property for the purpose of renting it out. There are mortgage brokers who claim that she can claim GST back for the investment she would be making. Is that correct? Would like to know more about GST and residential property....

Our expert responded:

Residential rental property is exempt from GST, so it follows that you cannot claim GST on the purchase price. Only developers and property traders who are buying property with the intention of on-selling it may claim GST on residential rental property under the second-hand provisions of the GST Act.

Kenina Court is a director of Acorn Solutions Limited, an accounting firm dedicated to working with clients to help them create wealth. She is an avid property investor, entrepreneur and seminar presenter on asset protection and wealth strategies.


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