Credits

Credits

Residential properties are not classified as new if they have been continuously rented out for a period exceeding five years, unless they were simultaneously held for sale and rent.

In the case where residential premises are not considered new, the sale of the property post-rental is exempt from GST. If you have previously claimed GST credits on construction expenses and associated purchases for non-new premises, adjustments to reverse these credits are necessary. This is because GST credits cannot be claimed for items purchased to facilitate input-taxed transactions.

If you choose to rent out newly constructed premises while intending to sell them, you must make adjustments to the GST credits you have claimed. Demonstrating your intention to sell the property, such as actively marketing it, is essential for this adjustment.

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