# GST on property



## Andrew Family (Aug 18, 2010)

I have noticed that on lifestyle properties the price says $xx + GST. On some it says 'if applicable'. How much is GST? Do you always pay GST?

Many Thanks


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## topcat83 (Apr 16, 2009)

Andrew Family said:


> I have noticed that on lifestyle properties the price says $xx + GST. On some it says 'if applicable'. How much is GST? Do you always pay GST?
> 
> Many Thanks


You only need to pay GST if it's going to be a business venture. Here's what we did: we bought our property as a family house (no GST) and we rent the land to my husband as a business (he's GST registered). 
The advantage of being GST registered is you can claim the GST back. The disadvantage is that if you paid GST then claimed it back then when you sell, you'll have to pay the GST on the sale (which might be more if the value of the property has gone up).

GST is 15%.


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## Andrew Family (Aug 18, 2010)

Thank you for your reply. So if we brought a lifestyle property for family use only we would not have to pay GST, excellent.


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## hunty8 (Jul 12, 2013)

I dont think the above info is correct! You will have to pay the GST since you are a business. GST is payable by individual customers!


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## topcat83 (Apr 16, 2009)

hunty8 said:


> I dont think the above info is correct! You will have to pay the GST since you are a business. GST is payable by individual customers!


He doesn't say it will be a business. If they have no intention of running it as such then it's definitely _not_ liable to GST.

And in our case, we bought our house and land as a 'family home', then decided afterwards that we would breed alpacas. So the 'family trust' leases the land to my husband, so he can run it as a business (and charge/claim GST). 

Always make sure you do the following when making an offer on any property:

1. Include the phrase 'subject to due diligence' in the terms
2. Sign as yourself 'or nominee' as the purchaser.
3. Make sure you have at least 10 working days before you go unconditional
4. Pay any deposit to your lawyer (and not the real estate agent), and only when you go unconditional (and not on making the initial offer).

1. will allow your lawyer to check things out before you go unconditional (and gives you a get-out clause if they find anything untoward)

2. will allow you to decide how the property is to be owned - i.e. as individuals, a family trust or as a business.

3. will give your lawyer time to check out the property, and for you to get a full survey done

4. will protect your money! I trust a lawyer over a real estate agent every time. I put this statement in as we had dealings with an (IMHO) extremely dodgy real estate agent who (whilst keeping him in their kitchen and making it very clear they didn't want him to leave) tried to tell my husband that he had to pay a 10% deposit to them at the point he made the offer, and 'that's normal practice in NZ'. Total poppycock! 

In any event - best advice is to run any purchase past a tax adviser & lawyer before making the final purchase.


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## NZCowboy (May 11, 2009)

There is no GST on dwellings.

Some lifestyle properties may carry out taxable activities that require the vendor or purchaser to be registered for GST, so this is why GST is mentioned.

Who is Required to register for GST 

You must register for GST if you carry out a taxable activity and if your turnover: 
• was over $60,000 for the last 12 months, or 
• is expected to go over $60,000 for the next 12 months
(This equates to $5,000 per month. If your turnover is $5,000 per month and you expect to maintain that level all year, you'll need to register for GST.), or 
• was less than $60,000, but you include GST in your prices, for example taxi drivers who have included 15% in their taxi fares. 

You can choose to register for GST even if your annual turnover it less than $60,000. This is referred to as voluntary registration.
Who needs to register? (Registering for GST)


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