Encounter the Difference

NZ CA is an association of independent Chartered Accounting firms, proactively working together for the benefit of our clients.

GST Traps - Real Estate

Published: 25th September 2017

Author: Anonymous

Published in: TrialBalance | #60

  • Vendors should always contract on “+ GST” basis for safety
  • If compulsory zero rating (CZR) applies, the vendor needs to make a final check to ensure purchaser is GST registered. Ask for the GST registration number.
  • If client assigns a lease as part of the sale of a business, CZR applies. A lease is an interest in land.
  • Principal place of residence exclusion only applies to individuals. Thus if a trust is buying a property and it is going to be occupied by beneficiaries, CZR still applies if both parties are registered for GST and the other conditions are met. Similarly, the principal place of residence exclusion does not apply to a company.
  • Costs relating directly to the sale or purchase of property in New Zealand by an overseas resident are subject to GST (legal, Real Estate, advertising).
  • Preparation of annual accounts and tax returns and legal advice about tax issues at the time of purchase are not directly related to the purchase so GST does not have to be charged to the overseas resident.
  • If the supply is incorrectly zero rated for CZR because the purchaser incorrectly stated they were registered for GST at settlement, the purchaser incurs the GST liability.
  • Purchasers should remember real estate valuations are usually quoted GST inclusive.

Exposure draft PUB00255 has just been released on this subject. It is an easy read and contains a flow chart and some useful examples. We attach a link to the IRD website

Related Articles

  • Auckland
  • Bay of Plenty
  • Canterbury
  • East Coast
  • Hawke's Bay
  • Manawatu/Wanganui
  • Nelson/Marlborough
  • Northland
  • Otago
  • Southland
  • Taranaki
  • Waikato
  • Wairarapa
  • Wellington
  • West Coast

nsaTax Limited

As a specialist provider, we have a specific range of services on offer to New Zealand and international businesses.

Tax laws and regulations, including their interpretations, are always changing and evolving so a large part of thier job is maintaining and developing our knowledge so we can continue to offer insightful advice and the most robust solutions to their clients

Region: Auckland

Phone: 09 309 6505

Accounting HQ Limited

Accounting HQ Limited is a client focussed chartered accounting firm. We believe in supporting our clients in all their financial matters and although we are a small friendly local firm we do offer a full range of accounting services for all requirements.
Accounting HQ Limited Chartered Accountants (CA) came from the merger of the Iles Casey Partnership, Farquhar Accountants Limited and Graeme Lee & Associates Limited, Chartered Accountant practices.

Region: Bay of Plenty

Phone: 07 348 7066

Brophy Knight Limited

Brophy Knight Ltd is a Chartered Accounting firm located in Ashburton, the capital of Mid Canterbury.

We are a member firm of NZCA, a New Zealand wide group of independent Chartered accounting firms focused on providing clients with a quality service.

We act for a diverse range of clients in Mid Canterbury and throughout New Zealand.

We are committed to forming close partnerships with our clients. This way we can understand your unique situation and customise the assistance we provide to suit your needs. Our commitment to excellence is evident in the hardworking nature of our staff, and the exceptional service we offer.

Region: Canterbury

Phone: 03 307 9051

No firms in East Coast

BM Accounting Ltd

BM recognise that different people need different things from their accountants depending on where they are in the business life cycle. Whether you are just starting out, are established in business or ready to retire we have the knowledge and expertise to support you. Similarly our dealings with a wide variety of industries and professionals help us to understand that everyone's requirements are unique.

Region: Hawke's Bay

Phone: 06 876 7159

Naylor Lawrence

Region: Manawatu/Wanganui

Phone: 06 357 0640

Wallace Diack Chartered Accountants Ltd

Region: Nelson/Marlborough

Phone: (03) 578 7389

Sudburys Limited

Sudburys look after business owners providing solutions in all areas related to accounting, finance and wealth management. They work alongside their clients, from supporting them with their daily accounting needs, to providing them with valued business advice.

Region: Northland

Phone: (09) 430 4888

G S McLauchlan & Co

GSM is a Dunedin based Business Advisory and Chartered Accountancy practice founded in 1957. 

GSM pride themselves on our specialist knowledge, our ability to keep fresh in today's ever changing environment

Region: Otago

Phone: 03 477 8192

McIntyre Dick & Partners Limited

McIntyre Dick & Partners Ltd is one of the top chartered accountancy and business advisory firms in Invercargill and with a diverse portfolio of clients throughout the south including Invercargill, Te Anau, Gore, Queenstown, Dunedin & throughout Otago.

Region: Southland

Phone: 03 211 0801

Harris Taylor Limited

The Accountancy world is constantly changing and highly competitive. At Harris Taylor their challenge is to stay ahead of the competition by providing the best possible service, whilst ensuring that client satisfaction remains our primary motivation and ultimate goal.

Region: Taranaki

Phone: 06 278 5058

GFA Chartered Accountants

GFA Chartered Accountants Ltd was formed on 1 April 2018 by Merv Gyde and Lance Fielder, two experienced Chartered Accountants based in Te Awamutu.

The name is an acronym for Guidance, Friendship and Acumen and reflects Merv and Lance and their teams approach to working with our clients.

It is based on the philosophical concept of Friends first, business later and forms the basis of the relationship between advisor and client, that in turn then allows the advisor to better understand the client's position and work with them to achieve their goals.

Region: Waikato

Phone: 07 872 6444

Southey Sayer

Offering a full range of accounting and business development services, tailored to meet the needs of each individual client. The wide range of expertise and experience within the firm is shared amongst the partners and their teams for their clients benefit. Services and products offered are fully flexible there will be no expectation to conform to a certain product or pricing structure.

Region: Wairarapa

Phone: (06) 370 0811

BW Miller Dean Ltd

BW Miller Dean Ltd was formed on 1 April 2016 with the merger of two long standing Wellington chartered accountancy practices: BW Chartered Accountants Ltd and Miller Dean Chartered Accountants Ltd. 

BW Miller Dean pride themselves on building relationships based on trust with clients through personal, individual attention, and always being available to help their clients with specialist Accounting or Finance functions when needed.

Region: Wellington

Phone: 04 910 3340

Marshall & Heaphy Limited

Central to the culture of the team that has been developed over their history, is the belief that successful and sustainable businesses are the backbone for the West Coast community. Great businesses create jobs, keeping people and family together on the Coast, building a sustainable community.

Region: West Coast

Phone: 03 768 7186