# Paying GST on Land in NZ.



## eastendoflondon

Hi All....bit of a long shot this one but here goes.

My partner and i are looking to buy about 11 hectares of land in Canterbury.
The land up for sale is designated as rural but we are allowed to build a house on it as we want it solely as a lifestyle property.We like horses and dogs and they like their space!
At present the owner is growing fruit on the land and the fruit picking management is outsourced to a specialist.We will be looking to have the fruit removed as a condition of the purchase.
The issue we have is that seller has advertised as + GST.I have investigated this and it appears that when the seller would have bought the land they probably reclaimed GST on their purchase and now they are selling they are looking to add the GST on top in order to satisfy the Taxman.Pretty sure GST hasto be paid as the owner is registered as a business.
We are not GST registered and don't intent to do so unless we haveto.However we don't think we should haveto incur the massive bump up in price due to the GST being added on top.
Has anyone come across this before or know anyone that can help?
Obviously initially we are looking for free advice before approaching a lawyer as we are only in the process of potentially making an offer.Were waiting for confirmation on what we can borrow from the bank.

Many thanks.


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## Yvonne.72

eastendoflondon said:


> Hi All....bit of a long shot this one but here goes.
> 
> My partner and i are looking to buy about 11 hectares of land in Canterbury.
> The land up for sale is designated as rural but we are allowed to build a house on it as we want it solely as a lifestyle property.We like horses and dogs and they like their space!
> At present the owner is growing fruit on the land and the fruit picking management is outsourced to a specialist.We will be looking to have the fruit removed as a condition of the purchase.
> The issue we have is that seller has advertised as + GST.I have investigated this and it appears that when the seller would have bought the land they probably reclaimed GST on their purchase and now they are selling they are looking to add the GST on top in order to satisfy the Taxman.Pretty sure GST hasto be paid as the owner is registered as a business.
> We are not GST registered and don't intent to do so unless we haveto.However we don't think we should haveto incur the massive bump up in price due to the GST being added on top.
> Has anyone come across this before or know anyone that can help?
> Obviously initially we are looking for free advice before approaching a lawyer as we are only in the process of potentially making an offer.Were waiting for confirmation on what we can borrow from the bank.
> 
> Many thanks.


If you're not intending to run a business you don't have to pay the GST, the vendor does. 

The seller will have to consider your offer for the property bearing in mind that he will still need to deduct the amount he will pay in GST from it. Don't let him add that to the purchase price.

May I suggest that you get a registered valuation done on the property before agreeing on anything.

If the fruit plants are to be removed ensure that the contract also provides for the re-instatement of the land, i.e. you want it ploughed, levelled and seeded with pasture grass. Last thing you want is a dust bowl and piles of dead plants that have to be burned-off.

Be aware that land used for intensive fruit growing in NZ often has traces of pesticides, herbicides and other chemicals. If you ever have aspirations to 'go organic' you won't be able to.

Also I believe Canterbury has some pretty strict bylaws about keeping grass short, so you'll either need lots of very hungry horses or stock on the land. This will mean having a barn to keep winter hay and food, irrigation for the summer months, good stranded wire fencing, electric fences etc. The latter can interefere with phone lines so many people use satelitte broadband.

There is an active online community on the net in NZ which you can go to for more detailed advice. I am not allowed to post the link here, or mention the name, but if you search for Lifestyle Block magazine you should find it. I recommend that you get some copies of the mag too.


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## eastendoflondon

Yvonne.72 said:


> If you're not intending to run a business you don't have to pay the GST, the vendor does.
> 
> The seller will have to consider your offer for the property bearing in mind that he will still need to deduct the amount he will pay in GST from it. Don't let him add that to the purchase price.
> 
> May I suggest that you get a registered valuation done on the property before agreeing on anything.
> 
> If the fruit plants are to be removed ensure that the contract also provides for the re-instatement of the land, i.e. you want it ploughed, levelled and seeded with pasture grass. Last thing you want is a dust bowl and piles of dead plants that have to be burned-off.
> 
> Be aware that land used for intensive fruit growing in NZ often has traces of pesticides, herbicides and other chemicals. If you ever have aspirations to 'go organic' you won't be able to.
> 
> Also I believe Canterbury has some pretty strict bylaws about keeping grass short, so you'll either need lots of very hungry horses or stock on the land. This will mean having a barn to keep winter hay and food, irrigation for the summer months, good stranded wire fencing, electric fences etc. The latter can interefere with phone lines so many people use satelitte broadband.
> 
> There is an active online community on the net in NZ which you can go to for more detailed advice. I am not allowed to post the link here, or mention the name, but if you search for Lifestyle Block magazine you should find it. I recommend that you get some copies of the mag too.


Hi Yvonne,we have come across the website you mention so will get registered on that one too.
I think you are probably right about the Canterbury grass mowing laws  
Part of me has always wanted to own a large sit on petrol lawnmower though.
We hadn't really discussed the chemical problems having long term effects so will haveto investigate that one in depth.
Thanks for the advice!


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