Do I have to pay GST on rent?

[McDuck]

Ok, I can see you are not willing to entertain this on a numbers basis.

what about this then.

Do you want to pay any tax at all given the choice?

[Perry]

OK, I can see you are not willing to entertain this on a numbers basis.

Numbers? I'm lost, now. Your
propositions were all in text.

What about this then.
Do you want to pay any tax at all given the choice?

That's a type of begging-the-question question,
instead of an answer to: "Do I have to pay GST
on rent?"

By all means let's define the terms. But in doing
so, the proposition remains (or should do) more
or less unchanged. That being . . .

If GST is a tax on the final consumer, and as
a consequence, all but the final consumer can
claim input tax as a deduction, why does this
not apply to those rentals which are residential,
but does apply to commercial rentals?

That's the nub, is it not?

As far as I can determine, the only answer is the
political one of a vote-buying, tilted playing field.

[McDuck]

This is taking too long.

I just want to look at the issue with an open mind.

You (seem) to want to sit on your position (the one where you are being hard done by).

I want to understand what it would take to make you feel justy treated.

First I need to know if you would pay tax given the choice.
Then I need to know how much tax you would like to pay.
Then I need to know how you would like it spent.
Then I need to figure out if your expectations are realistic.

McDuck out.

[Perry]

Is it really a matter of too long? Or are you
making the idea into something it isn't?

This is not about how I feel about taxation,
generally, it's how I perceive the unjustness
of a tax on the final consumer being paid by
the penultimate consumer, instead.

I want to understand what it would take to
make you feel justly treated.

The answer is: to be able to recover GST
on residential rental expenses of every sort.

And I mean that exactly. No more nor less.

If, for political reasons, the W'gton woodenheads
see the addition of GST to residential rentals as
a big problem, then let them exempt residential
rental payments. (like exports)

But let the said W'gton woodenheads 'pick up'
that cost, themselves. I.e. allow residential
rental PIs to claim back GST, but not be required
to charge GST.

That way, the cost of the political decision remains
with the W'gton woodenheads. Not with the PIs
whom have residential rentals.

Presently, we are paying the W'gton woodenheads
costs of currying tenants'/electorate/political favour.

[McDuck]

Sorry about the delay, just got back from the beach.

Ok, none of this is working.
Totally different angle on it. forget the other two attempts. Lets get pragmatic.
Are you saying that you want GST applied to all consumption?
Are you saying that you want to collect GST from your tennants to give to the Govt?
(why make work for yourself?)
So since people pay Rent or pay Interest to live in a house...
Do you also want the bank to charge you GST on your loans.
It just seems crazy to me to want to have to do more work on behalf of the GOVT with no actual gain on your part.
Help me out here, you want to pay more and do more....???
why?

[Perry]

Jees, McD - read my last reply slowly and carefully.
Especially the latter parts. Nowhere did I say that
I was trying to make work for myself. And neither
am I saying (you're trying to put words into my
mouth, it seems) anything like what you're sug-
gesting. To recap . . . .

You asked:

I want to understand what it would take to
make you feel justly treated.

I replied:

The answer is: to be able to recover GST
on residential rental expenses of every sort.

[McDuck]

Ok.

We will work in that narrow window.

What makes you think that GST can Passed on?

Lets look at an example.

You (a private individual) buy paint from a Shop (a Commercial entity) to paint.. whatever.
The shop acts as tax collector for the GOVT at the point of sale and collects GST of 12.5% along with their sale price.
The shop then gives that 12.5% to the GOVT.
End of story.

You put the paint on your house.
You consumed the paint.
You paid the gst.

Consumption tax.

what's the problem?

[Perry]

We will work in that narrow window.

Then you move to the casement doors?

I am not the final consumer of the tenancy
in my residential rental. The tenant is.

I can't make it any plainer.

I give up.

[McDuck]

No it appears that the GOVT considers you to be the final consumer.

Say a "phisical lifting" type of worker decides that the food he eats "is consumed by his employer" as part of doing his days lifting work...so wants to pass on the GST on all his food to the employer.

No, can't do it.

The GOVT has not allowed that.
A worker is where the buck stops, and a private landlord is where the buck stops.

If you want to get your GST offset, then you could rent out to a commercial entity.
The Rules allow that.
You could just add 10.5% to you rent and keep all of it.
The Rules allow that.

If you want to change the Rules on GST, then you can do that.
You may not like all the changes you get, like I said, more will work against you than for you.

Here are some other people making similar noises, re paying GST on things.

“GST is an unfair tax because those on lower incomes spend a higher proportion of their incomes on basic commodities such as food, and therefore pay a higher proportion of their incomes in tax. It’s a regressive tax, and that is the opposite of what Alliance policy is about,”

http://www.alliance.org.nz/index.php/2008/10/08/real-alternative-to-gst-is-there-says-alliance-party/

Don Brash chaired the committee that established GST in the 1980s, so is pretty much an expert in this area. He labels any move to remove GST on food as a “seriously stupid thing to do”.

http://www.kiwiblog.co.nz/tag/gst

It's not like GST is a new thing.
I think there was even a sales tax on lamp oil in Egypt about 5000 years ago....yes as well as income tax on wheat production.

You know the rules, you are free to figure out ways to work within them to make money.

[Perry]

No it appears that the GOVT considers you to be the final consumer.

Which seems to be what I have observed, earlier.
I am not the final consumer, the tenant is. It
matters not if the tenant is Smith's Sweet
Shop Ltd or Mr & Mrs Smith @ home.

In one case I can claim GST input tax; in the
other - I can't. That the government[s] has
bent its own rules is just a matter of state-
sactioned inequity and political expediency.

No less, no more.

[McDuck]

The government[s] has
bent its own rules is just a matter of state-
sactioned inequity and political expediency.

No less, no more.

That my be the case, or it may not.
The motivations behind the GST structure are only known to those who formed them back in 80's

As I keep trying to point out to you,
You are a private person, not a company.

Yet you share some of the qualities of a company, and some of the qualities of a private person.

So you are in the mid ground.

Just like a restricted driver.
Has some of the attributes of a full driver but not all of them.

THe GOVT has grouped you in closer to a Private person than to a Company.

If I were you I would rather that the GOVT did not decide to group Landlording in with full commercial activity.
Because then they would target ANY form of gain.
Trust me, you really don't want that.

so, Why should the GOVT overhaul the GST laws to match your position alone?
Everyone complains that GST is not fair on their situation in particular...Workers, Landlords..Importers...it goes on.
Once you agree to the overhaul, to be fair, it should even out all the positions.
The GOVT thinks they have done that as best they can.

Overhauling GST is a can of worms you don't want to open up.

[Perry]

As I keep trying to point out to you,
You are a private person, not a company.

That's irrelevant for tax purposes.
A sole trader can be GST registered -
no company status required.

The Govt has grouped you in closer to a Private person than to a Company.

Bollocks (contextually). A limited liability company
that's GST registered cannot claim input tax on
any residential rentals which it may operate.

If I were you I would rather that the GOVT did not decide to group Landlording in with full commercial activity.

What?!?!? Are you trying to poke fun at me?
Landlording related to commercial/industrial is
a full commercial activity and GST is treated as
a tax on the final consumer - the tenant.

Why should the GOVT overhaul the GST laws to match your position alone?

If you thinks it's my position, alone, perhaps you
should ask around? I say that the GST exclusion
for residential rentals is inequitable. It is a residential
tenant 'subsidy' of sorts, by the PI.

I've also maintained that such a tax stance is quite
inconsistent with the concept and that the only
reason that I can see for why the government[s]
would do that is one course of action garners more
votes than another.

Exporters can recover GST inputs, even though
the final consumer overseas pays no NZ GST.
Let residential rents be the same: exempt from
GST for the final consumer, but that input tax
deductions be allowed for PIs.

They bit the bullet on food and clothing, why did they
waver in regard to residential rents?

As you opine, we may never know, fickle politicians
that they are.

[ream]

If you thinks it's my position, alone, perhaps you
should ask around? I say that the GST exclusion
for residential rentals is inequitable. It is a residential
tenant 'subsidy' of sorts, by the PI.

Um, dare I say it....I agree with Perry. Any more game enough to take a stand?
Ream

[McDuck]

So are you saying that you would like the GOVT to restructure the way GST works?
Or do you want them to leave it alone?

[ream]

I think it should be made equitable in the sense that Perry's talking about, although being from the UK I agree with Don Brash that trying to zero-rate food etc (eg cold food but not hot food, as in the UK?) wouldn't be worth the effort required by all parties. But I obviously don't have as big a bee in my bonnet about the whole thing as you two have, not by a long way