Commercial tenants must pay rent GST

Press, 30 September 1986, Page 2

Commercial tenants must pay rent GST

Commercial tenants have been inquiring about GST, after the statement by the Minister of Housing, Mr Goff, that the new tax would not apply to rents. The Minister’s office confirmed yesterday that the statement referred only to residential tenancies and that the new tax would apply to most commercial rentals. "As Minister of Housing, he talks about housing rentals.” said a spokesman for Mr Goff’s office. But a big Christchurch property rental firm, G.U.S. Properties, reported many inquiries from its commercial tenants confused by the statement, and there were many more similar calls to the GST Co-ordinating Office in Wellington. The property firm’s divisional manager, Mr Nelson Kennedy, called Mr Goffs office to tell him of the confusion among retailers who had already been told they would have to pay the tax on their commercial rents. The deputy director of the GST office, Mrs Marilyn Goddard, explained that GST would be payable on commercial rents where the landlord was a registered taxpayer. A landlord had to register if total rents were more than $24,000 a year. Some other rental contracts may also miss out on the tax when it comes into force tomorrow. Contracts in force before August 20, 1985 —

when the Minister of Finance, Mr Douglas, made the final announcement about the tax — will escape GST indefinitely if these have no review clause. For contracts reviewed since that date, GST will apply from tomorrow, and for other contracts the tax will apply when next reviewed. Most people paying the tax on commercial rentals were registered taxpayers themselves, and so could claim for the payment anyway, Mrs Goddard explained.