GST Flashcards
What businesses are registered for GST?
+$75,000 turnover for profit businesses, +$150,000 for non-profit organisations
When is GST applicable for property?
Newly developed residential sites
Commercial and industrial sales
Development sites
Commercials leases
Substantial renovations (within 5 years - this makes the property ‘new’)
When does GST not apply?
Existing residential property
Rent for residential property
sale of farmland
lease of farmland
Selling a going concern
What is the margin scheme?
If you are eligible, it allows you to pay 1/11th GST on the sale margin (sale price - purchase price) instead of the entire selling price.
When can margin scheme not be used?
Cant be used if not registered for GST
Cant be used if property previously purchased without margin scheme
It can only be used for property acquired prior to July 1 2000, or where property is acquired using margin scheme after 1 July 2000
Is farmland GST free or GST applicable?
It is generally GST FREE when:
the land has been used for farming for at least 5 year before sale
The buyer intends to continue to use the premises for farming purposes
The property has a long term lease from the Gov and likely to continue
Is GST payable on Commercial sales or rents?
Yes it is usually payable, however these can be claimed as GST credits if the property is used for the continuation of an enterprise.
When selling commercial property there are three main options, what are they:
It can be sold under margin scheme if applicable
If leased, it can be sold as going concern and therefor it is GST free
Sold as a taxable supply and GST paid at 1/11th purchase price.
Are figures in commercial usually quoted as GST inclusive or exclusive?
It is common practice to quote all figures on GST exclusive basis
What is a going concern premises for GST purposes?
Going Concern includes premises sold with assets and operating structure of business in place (hotel, motel, service station). But can also include fully tenanted buildings (shopping complex) where the property and all leases, agreement and contracts are included in the sale.
