GST IMPACTS ON PROPERTY

With A GST not far away many people are still wondering how it will affect them directly.
This may make things that little bit clearer in regards to what GST applies to and what it doesn't.
GST will be charged on the following:
-Building materials and labour.
-New residential construction.
-Renovations.
-Services to property owners ( e.g agents fees, legal costs etc)
- commercial property sales.
-commercial property leases.
GST will not be charged on the following:
-Sale of existing residential property by individuals.
-Council and water rates.
-Residential rents, however landlords cannot claim GST credits. This will raise input costs to landlords and therefore rents are expected to rise by 4% to compensate.
GST will not be charged on stamp duty.
Please remember there will be a first homebuyers one off $7,000 grant from the government. This will not be means tested but you will only be able to apply for this if you have never owned property before.
The people more likely to benefit from this grant are lower income earners buying into areas that are priced around $120,000- $190,000.