GST in purchase price, some questions thanks

[jack2016]

Hi I have been looking at a section and the vendors are a holding company and is GST registered. Naturally they want me to pay the GST.

Now could I ask a few questions about figuring out how much they paid.

If homes.co.nz says the previous purchase price was X amount, assuming it was purchased from a non GST registered party?

Is that X inclusive or exclusive of GST?

Does the GST mean the company has not paid a cent on the GST and I suddenly have to fork out 15 % to the govt for some reason?

[Rosco]

Hi Jack2016,

General is that developer will buy. say $230k for example.

They will claim the GST back, 30k.

So there real cost is $200k

Then if they sell to end user (I'm guessing you), to build a personal house or long term rental on, and to make the example easy, make no profit. - then either sell for $200 + GST or $230k inclusive of GST. $230,000 inclusive of GST would be the normal when selling to a non GST registered party.

The developer receives $230k from you, and then pays $30k to IRD. Leaving them with $200k, so $0 profit.


I hope this clarifies that you are not suddenly forking out the GST.

Ross

[jack2016]

Hi, that really does help. THanks again.