Question re GST changes

[blacksheep15]

Hi all

This may be a dumb question but would like an answer all the same please!

We have a block of land that we purchased at 12.5% GST, can someone please tell me what happens if we sell it after 1 October? Do we have to pay back the GST at 15% on the sale price? For example, if it sells on 2nd October it seems unfair to have to stump up the extra GST on the sale.

Thanks in advance for your help.

[graemeh]

If you are required to be registered for GST then YES you do.

Talk to your accountant though. If you are on an invoice basis and have a sale lined up you may be able to arrange for your GST Invoice to be issued on or before 30 September 2010 even though your buyer is paying later.

Note that I am not an accountant and there may be some weasel clause the IRD have that stops this but you should definitely investigate.

If you are not required to be registered for GST and there isn't some weasel clause from the IRD that make you liable for GST on this sale then you're fine.

[Rosco]

It depends on when the time of supply is, which is normally when the property goes unconditional.

So unconditional sale before 1/10/10, then GST at 12.5%.

Sale after 1/10/10, then 15% GST.

There is transistional rules if on payments basis for GST to fix up issues.

Ross