Land Purchase – When Not to Claim GST

Land Purchase – When Not to Claim GST

Do not claim GST on residential land purchased unless you are sure you are going to sell it. If you do claim GST and convert to a rental, the sale of the property will always be subject to income tax even if you sell it to an associated entity in the meantime. By claiming the GST you are notifying IRD that you purchased the property with an intention of resale.

Source: Tax-e-mail Issue 2201

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