GST on commercial property sale.

[Lemon]

Selling an untenanted commercial property and I'm not GST registered and the purchaser is.

Accountant says I'm to put down purchase price as inclusive of GST. The purchasers lawyer says the same and that they are going to claim the GST under a second hand good provision.

Just wanting to make 100% sure I'm not going to be paying the GST on the transaction and I don't really understand how they intend to claim the GST that I'm not paying.

[Rosco]

Hi Lemon,

Presume your income in the entity that owns the building is under $60,000 of taxable supplies. If for example the rent was over this, or rent plus a business activity was over this, then you should be GST registered, so you would have some issues to sort out!

As long as no issues re the above and your entity is definitely not GST registered, then your advice above is correct and you won't pay GST on the sale.

A GST registered purchaser can make a second hand goods claim on the asset, and get the GST back. Same if a business purchased a car from a normal mum and dad over trademe, they would be able to get the GST back.

Ross