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  1. #1
    Join Date
    Nov 2014
    Posts
    127

    Default GST Register company after 1 trade?

    Hi

    For property trading i will use a company for my first property trade. Is it okay to not gst register the company for the first one, see if i want to continue doing them and if so then make the company gst registered?

    Also i have recently sold one of my buy and holds about 3 months ago. Will the IRD see the sale of this property and my first trade as continuous so i should be gst registered?

    If this sounds about right, there will be no need to gst refund and pay back on the property but i will need to pay tax on this property?

  2. #2
    Join Date
    Oct 2013
    Posts
    1,609

    Default

    As always, with something complex like this, talk to your accountant, and consider getting a second opinion from a property accountant. It will depend on your situation. But my short answer is probably not necessary to register for GST, but certainly necessary to pay income tax on any profit made.

    The IRD has different views on "Speculators" (people who buy a property with the intention to sell it), and Dealers/Traders (people who have a regular activity of buying and selling property for profit). The standard rule for GST registration is that you're undertaking a regular and continuous activity. In your first attempt, to 'dip your toes' and see if you like it, you're clearly not regular or continuous. In fact, some people argue that even if registered you can't claim GST on your first trade. I personally disagree, and would register so long as the intention to undertake regular and continuous trading exists (which in your case, doesn't).

    As for the recent sale of the buy and hold, again will depend hugely on the situation. If you've owned it for a while, and had no intention to sell it when you originally bought it, there should be no problem there.
    Last edited by Anthonyacat; 04-06-2015 at 02:45 AM.

  3. #3
    Join Date
    Nov 2014
    Posts
    127

    Default

    Whats the advantages and disadvantages of GST registering?

    My thoughts are below, any others?

    Advantages
    Could use this income for future loans (may take a few years)
    GST when brought so good cashflow in beginning
    Claim gst on products/tradies


    Disadvantages
    Pay GST when selling


 

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