We bought a house in papakura on 17 june 2010 for $200,000. We claimed back the gst on pp and all expenses. Our intention was to do it up and sell. We then found it was subdividable and decided to subdivide build a new 4 bedroom houseand do up the existing house and sell it. The 4-6 months for subdivision dragged on and with the old house being vacant it was broken into a few times so we decided to rent it out . We did this 18th june 2011 for $360 week which we haven't paid GST on. We built the new house claiming back all gst on expenses at the back and finally got our subdivided titles on the 3 december 2012. We sold the new house for $360 000 as of 18 january 2013. We will pay $46 957 gst to the IRD for the new house. We have also decided to change our use for the old house to a rental investment as from the start of february 2012 our reason is we got great tenants in what is quite a tough street and have decided it is a good rental investment.
My question is did we need to pay gst on the rent, do we need to pay back all of origional gst for pp and improvements to old house, or do we apportion land component for the new subdivided section and not pay this part of the gst backi.e. 860m2 section old house got 351m2 new house got 529m2, from gv land value is50% so $100k total land value so new house has $59k of the original land
Thanks Ben
My question is did we need to pay gst on the rent, do we need to pay back all of origional gst for pp and improvements to old house, or do we apportion land component for the new subdivided section and not pay this part of the gst backi.e. 860m2 section old house got 351m2 new house got 529m2, from gv land value is50% so $100k total land value so new house has $59k of the original land
Thanks Ben
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