Plus GST problems

Our Experts Answer:

You say that despite the properties being "deemed commercial" you intend to let them "as normal residential rentals". If this is the case you will not have a taxable activity for GST purposes because the provisinon of accomodation in a dwelling on a standard residential tenancy basis is exempt from GST. This means you don't even have the option to become registered. Accordingly any offer you make should be inclusive of GST and you should complete your schedule 2 GST warranty on the basis that you are an unregistered purchaser who will not be conducting a taxable activity from the property. It is not wise to talk yourself into paying more than the property is really worth of the strength of an invalid taxable activity for GST. The only way a genuine GST registration would be appropriate is if you let the porperty on a commercial lease. This would not include the provision of accomodation in a dwelling. The contract can still be drafted plus GST if this is the way the vendor wants to present it but the price obviously needs to be reduced by 15% if you are to achieve your desired outcome.