Currently looking at a couple of commercial properties as an investment and want to know if the contracts have to say if the sale price is inclusive or exclusive of GST ..... do we also have to register for GST?
Hi Ben,have a read of this article which explains it.I recently have been involved in a commercial property purchase and found this helpful.
Generally speaking, the property will be GST free under 'Going Concern' provision, if it is sold with an existing tenant. Look for Going Concern on the front page, and be familiar with the GST clauses later in the document. Check to ensure the lease is current as well.
Confirm the details of the contracts with your accountant and/or commercial/tax lawyer before finalising. Might also pay to discuss with finance broker/bank manager for fall-back.
The GST is a round/robin of money - you pay to the seller, who passes it on to the ATO, where you claim it back from. So yes - you'd need to be registered for GST.
firstly YES the contract need to state whether or not the sale includes GST or is GST free.
secondly you need to make up your mind if you want to be registered for GST, or perhaps whether you must be registered for GST.
For most people, the temptation of getting 1/11th of your investment back is a very good motivator for making sure that you ARE in fact eligible to claim this back, or able to complete the sale as a GST-free going concern.
Soooo, get yourself in front of a good adviser who can walk you through the pros and cons......the cost of the advice will be a drop in the ocean compared to the potential cost to you if you get this wrong at the start.