Leaky building - Should I register for GST?

[AlexE]

Hi Folks,

I mentioned in an earlier post that I have an Auckland apartment that has been recently declared leaky. Repairs will begin later in the year, and will end up costing me approx $75k. Can someone please tell me, should I be registering myself for GST? It was mentioned to me by someone that it might be advantageous to do so.

My knowledge on GST (and taxation in general!) is very hazy.

Thank you

[eri]

i think we would all love to know which building you mean

[AlexE]

I'm sure you would Eri!

[Rosco]

How is the apartment rented? Is it just a normal residential rental?

Ross

[AlexE]

How is the apartment rented? Is it just a normal residential rental?

Ross

Hi Ross,

Yes its a normal residential rental.

[Rosco]

Hi Ross,

Yes its a normal residential rental.

Then presuming you are a long term hold investor, there is no GST. So you could register, but there would be no point as you wouldn't get any GST claim.

Ross

[AlexE]

Then presuming you are a long term hold investor, there is no GST. So you could register, but there would be no point as you wouldn't get any GST claim.

Ross

Hi Ross,

I understand that there is GST being charged on the repair work. Am I able to claim on this?

[donna]

If you are 'in business' regularly providing a service and your revenue is over $60K you have to register for GST - (under $60K GST reg. is voluntary) earning a salary or wages does not count so you can not claim GST. I know it hurts having to pay GST especially on a large ticket item like home renovations etc but that's just the way it is.

See IRD link

If you were trading properties e.g. buy, and sell or buy, renovate and sell then you'd register for GST and be able to claim the GST on services provided to your 'trading business' - hence Ross asking if you were a buy and hold investor.

So as buy and hold investors we pay GST on services rendered but can not claim the GST back. Best to get a good Accountant who can let you know what expenses you can offset against rental income etc.

cheers,

Donna

[Rosco]

Hi Ross,

I understand that there is GST being charged on the repair work. Am I able to claim on this?

No if you are a long term hold investor. Same as there is GST on rates and insurance, but you can't claim this GST back either.

Ross

[speights boy]

Confusion over leaky building GST refunds

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10868949