Do I have to pay GST on rent?

[Perry]

A rental can be owned.

But not simultaneously by the
tenant and the PI, surely?

[McDuck]

But not simultaneously by the
tenant and the PI, surely?

Correct, who owns it is not the point, that it can be owned is the point.

But now I'm very interested in your view on this.

So, would you state your main problem with GST as it relates to your situation.
That way I can think it through with a real example.

[Perry]

Would you state your main problem with GST as it relates to your situation.

GST is allegedly a tax on products or services used by the 'final' consumer, in NZ;

The residential rentals I have provide a service , which is used by tenants (as final consumers);

I pay GST on inputs but cannot claim said input tax.

Tenant is therefore subsidised by me to the value of any GST expenditure relating to the costs of providing them with a residential rental service;

Therefore GST is not a tax on the final consumer of a product or service;

That whimsical arrangement is a political posturing matter (lie).

[McDuck]

Thanks Perry.

Would you be able to clarify what you mean by

"I pay GST on inputs"

McDuck.

[Perry]

How about GST on rates as a basic item?
(un-recoverable)

[McDuck]

How about GST on rates as a basic item?
(un-recoverable)

Yes that's a good one.
Probably all of the"Inputs" need to be considered as a group.
So what are they?

1 Rates.
2 ?
3 ?

[Perry]

2. R & M
3. Insurance

(I'm sure you could guess at these, so
what's behind the questions?) Your turn . . .

4. ?
5. ?

[McDuck]

I could guess, but then we might be mistaken in our terms.

I was thinking of comparing a rental situation with say,,, a Chainsaw rental shop...
or with say the private sale of an old lawnmower...

Just to get to the heart of when and why GST is applied ...or not.

So we are looking for an even application of the rules...and then to see why this is not the case.

Thus getting to the motivation behind the Tax.

But first another question.



Is Interest considered an "Input"?

[Perry]

As I recall, financial services (incl. 'interest') are
either zero rated or exempt from GST. Nett
effect is the same. There is no GST on bank
account-keeping fees.

Maybe something to do with an incestuously
cosy arrangement between governments and
financial institutions!

But I'm not sure if financial institutions can claim
GST on their day-to-day operations. I must ask . . . .

I was thinking of comparing a rental situation with say, a Chainsaw rental shop...

chainsaw = capital item available for rent
residential house = capital item available for rent
Why should they be treated differently, for tax purposes?
(as distinct from for political purposes)

or with say the private sale of an old lawn mower...

private sale = no GST
private purchase = no GST
private seller to GST-registered business buyer = GST claimable by buyer
(there are now rules about the assessable amount)

GST has nothing to do with profit, like income tax.
Incorporated societies and charities can be GST
registered.

[McDuck]

Exaclty.

Back to the first example.

Can we use the trems "outgoings" and "income".

In the first group "outgiongs" we have:
1 Rates.
2. R & M
3. Insurance
4. Interest

and in the second group "Income" we have:
1 Rent
2 Capital gain.

correct?

[Perry]

Nope.

Residential & commercial rent is income and is taxable as such.
(Commercial income is GST assessable on both inputs and outputs)

Capital gain is a result of government economic malfeasance,
mis-management/inflation and is not income and is therefore
not taxable as such.

[McDuck]

Lol.

I'm coming to that.

To get a really clear picture on this, we need to seperate and define the terms.

Really clean thinkers do this.

so we have four groups.

1. Expenditure
2. Income.

then

A.Tax
B. Rebates.


So we first need to agree on the income and expenditure.

[Perry]

Does "A. Rebates" = tax deductions?
Tax is a cost - an expenditure. So
how is tax some different classification
to expenditure?

Where would a 'loss' be placed?

Both a cash loss and a tax loss?

The muddied thinker

[McDuck]

1. If it comes out of your pocket, then it's expenditure.
2. If it can go into your pocket, then it's income.

A. If it's paid to the Govt, then it's a tax.
B. If the Govt pays it back to you, then it's a rebate.

easy?

So a tax is not a cost "1" as such in ths case because it more properly belongs in "A".

The reason that tax has it's own group is because the properties of the Govt are such that they have the extra quality of system managment rather than just system user.
In other words , it would not be comparing apples with apples.

[Perry]

1. If it comes out of your pocket, then it's expenditure.
2. If it can go into your pocket, then it's income.

A. If it's paid to the Govt, then it's a tax.
B. If the Govt pays it back to you, then it's a rebate.

easy?

So a tax is not a cost "1" as such in this case because it more properly belongs in "A".

That seems like a bit of circular logic, does it not?
If the payment of tax (A) does not come out of
your pocket (1.) then where does the payment
come from?

I recall hearing the acerbic comment once, that
went something like: Sure, my salary's good.
It's just the take-home pay I can't manage on.

The reason that tax has it's own group is because the properties of the Govt are such that they have the extra quality of system management rather than just system user.

I don't understand that descriptor. However, I may
have some sympathy with the general notion. But
governments are renowned for poor system manage-
ment. Indeed, I suggest that it's only their arrogated
power to take by force that gives them their own 'group.'