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Thread: GST hike to hit some property buyers

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    MotherBear's Avatar
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    Default GST hike to hit some property buyers

    GST hike to hit some property buyers
    By Susie Nordqvist
    4:08 PM Friday Sep 17, 2010

    Unsuspecting investors could end up paying thousands of dollars more on property deals settled on or after October 1, as developers share the burden of tax hikes.

    The change affects anyone who has entered into a conditional contract with a GST inclusive price before October 1, and could see a buyer paying several thousand dollars more for a property.

    GST increases from 12.5 per cent to 15 per cent next month.

    Barney Cumberland, senior associate at Simpson Grierson said GST registered sellers have a statutory right under the GST Act to increase their price in line with the goods and services tax.

    "Even though a deposit may be paid prior to 1 October, what we call GST time of supply doesn't occur until the later time - post 1 October - when the contract becomes unconditional," he said.

    An example could include a non-GST registered purchaser who has a contract with a developer to purchase a dwelling for private use off the plans.

    Harcourts chief executive Hayden Duncan said the implications for anyone in the market for a property with a GST-inclusive contract, were significant.

    More here.
    Mother Bear

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    macfod's Avatar
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    Default Thats it then, more to Dunedin!

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