Are you in the process of buying or selling a property in New Zealand? If you are, then you may have come across the term “Sale and Purchase Agreement NZ GST”. In this article, we will explore what this agreement entails and what you need to know about it.
Firstly, let`s define what a Sale and Purchase Agreement is. It is a legally binding contract between a buyer and a seller that outlines the terms and conditions of the sale and purchase of a property. This agreement includes details such as the purchase price, payment terms, settlement date, and any special conditions.
Now, let`s talk about GST. GST, or Goods and Services Tax, is a tax that is levied on most goods and services sold in New Zealand. This includes the sale and purchase of property.
When it comes to buying or selling a property, the GST status of the property must be established. If the property is registered for GST, then the sale price will include GST. This means that the buyer will need to pay GST on top of the agreed purchase price. If the property is not registered for GST, then no GST will be payable by either party.
The Sale and Purchase Agreement NZ GST clause outlines whether or not GST is payable on the sale of the property. This clause will state whether the sale price is inclusive or exclusive of GST. It will also specify who is responsible for paying the GST. In most cases, the buyer will be responsible for paying the GST.
It is important to note that if the seller is registered for GST and the property is being sold as a “going concern”, then no GST will be payable. A “going concern” refers to a business or enterprise that is being sold and continues to operate after the sale. In this case, the sale of the property is exempt from GST.
In conclusion, the Sale and Purchase Agreement NZ GST clause is an important aspect of buying or selling a property in New Zealand. It outlines whether or not GST is payable on the sale and who is responsible for paying it. As a buyer or seller, it is crucial to understand the GST status of the property and the implications of the Sale and Purchase Agreement NZ GST clause. Seeking the advice of a legal professional is highly recommended to ensure that all aspects of the agreement are understood.