View Full Version : Property sold with GST
proud owner
22-07-13, 11:55
A friend of mine recently bought a commercial property for investment.
However, the seller is GST registered company.
The property is advertised at 10mio ... however, with GST, its 10.7 mio...
is there any way that he can avoid paying that 700k ?
A friend of mine recently bought a commercial property for investment.
However, the seller is GST registered company.
The property is advertised at 10mio ... however, with GST, its 10.7 mio...
is there any way that he can avoid paying that 700k ?
If its a shell company. you could buy the company together with the property.
I am sure a tax accountant can advice your friend. It is not difficult.
A friend of mine recently bought a commercial property for investment.
However, the seller is GST registered company.
The property is advertised at 10mio ... however, with GST, its 10.7 mio...
is there any way that he can avoid paying that 700k ?
proud owner
22-07-13, 12:36
If its a shell company. you could buy the company together with the property.
hihi the owner is a subsidiary set up to rebuild the property ..
you mean you can buy the property together with the subsidiary ?
wouldn't that still mean my friend has to pay GST for the prop and the company ?
hihi the owner is a subsidiary set up to rebuild the property ..
you mean you can buy the property together with the subsidiary ?
wouldn't that still mean my friend has to pay GST for the prop and the company ?
If the subsidiary company is a company created solely for this particular property, you can actually buy over the company (minus the liability if any) together with its asset (which is the property).
There is no GST for acquiring companies.
proud owner
22-07-13, 18:11
If the subsidiary company is a company created solely for this particular property, you can actually buy over the company (minus the liability if any) together with its asset (which is the property).
There is no GST for acquiring companies.
I am not sure I understand...
the property is listed at 10 mio ...
with GST it will cost 10.7 mio
are you suggesting that my friend buy over the subsidiary (with the property as the only asset) at 10 mio ?
proud owner
22-07-13, 18:13
If the subsidiary company is a company created solely for this particular property, you can actually buy over the company (minus the liability if any) together with its asset (which is the property).
There is no GST for acquiring companies.
apparently the subsidiary is also GST registered ...
does your suggestion work in this case ? in order to save the 700k ?
apparently the subsidiary is also GST registered ...
does your suggestion work in this case ? in order to save the 700k ?
It should work. Best is to consult lawyer and they will know how to guide your friend. $700k can almost buy you a 1 bedder at J Gateway...:D
Try setup a company. Then register it as a GST company(forgot how much but very little amount) and use the company to buy over the property. Should be able to get a GST rebate thereafter
Buying over company shares incurred stamp duty 0.2% of share value compared to 3%-$5400 property stamp duty.
Legal fee will be higher as more work by lawyer.
Loan will be the biggest issue. It will not be a simple task like taking over the existing loan.
A simpler solution is to setup a new company and buy under this company name. Get it GST registered then claim back GST paid. Need to pay GST first, no loan. Need to manage the cash flow but this will save $700k
Try setup a company. Then register it as a GST company(forgot how much but very little amount) and use the company to buy over the property. Should be able to get a GST rebate thereafter
But no records of revenue, how banks going loan to the company?
But no records of revenue, how banks going loan to the company?
Director's income assessment
Yup. Commonly done.. Seen a lot doing such during new launch for commercial and industrial projects
proud owner
23-07-13, 11:35
A simpler solution is to setup a new company and buy under this company name. Get it GST registered then claim back GST paid. Need to pay GST first, no loan. Need to manage the cash flow but this will save $700k
as far as I know , my friend wont need to take any loan...
so as you suggested, set up a GST registered company, buy over the property at 10mio + 7 pct GST. and then claim back the GST.
do you know how long would it take to claim back the GST ?
after the claim, can he de-register the company ? and become just a private individual owner ?
princess_morbucks
23-07-13, 13:04
http://webcache.googleusercontent.com/search?q=cache:b6qoB8JP1P4J:www.iras.gov.sg/irashome/uploadedfiles/e-Tax_Guide/etaxguides_GST_Property%2520Owners%2520and%2520Property%2520Holding%2520Companies.pdf+gst+refund+of+company+property&cd=1&hl=en&ct=clnk&gl=sg
Mabbe this will help?
princess_morbucks
23-07-13, 14:01
Please ignore the one above.
This one should be better.
http://www.iras.gov.sg/irashome/page04.aspx?id=2328
You can claim GST incurred on the purchase of non-residential properties, subject to the conditions for claiming input tax. Such claims can include the GST incurred on the purchase of property, conveyance expenses, construction and development costs and professional fees.
as far as I know , my friend wont need to take any loan...
so as you suggested, set up a GST registered company, buy over the property at 10mio + 7 pct GST. and then claim back the GST.
do you know how long would it take to claim back the GST ?
after the claim, can he de-register the company ? and become just a private individual owner ?
When I say no loan, I meant no loan for the GST amount. Need to keep the registered company for 2years if u registered as GST. GST submission is quarterly so can claim back with 4-6months. If later u close company then sell property to yourself, u will incur stamp duty and GST another round so not a good idea.
If no loan is needed then explore the first option of taking over the existing company which owns the property is the better option.
100% cash transaction is easy. there are ways to dodge this.
With a loan, things get murkier...:banghead: :banghead: :banghead:
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