I understand that from 1/7/2012, businesses who use a hire purchase agreement to purchase equipment have been able to claim back GST on the interest component. Does this also apply to the interest component of a chattel mortgage?
Hi @DWJ
Not quite.
A chattel mortgage is a secured loan against the asset you use the loan to buy. While the asset itself likely will have GST, and that GST is claimable immediately, the loan is an input taxed financial supply, and no GST applies.
You can read about how a chattel mortgage differs from a hire purchase on our website.
**updated to reflect correct information 10 December 2021**
Hi @DWJ
Not quite.
A chattel mortgage is a secured loan against the asset you use the loan to buy. While the asset itself likely will have GST, and that GST is claimable immediately, the loan is an input taxed financial supply, and no GST applies.
You can read about how a chattel mortgage differs from a hire purchase on our website.
**updated to reflect correct information 10 December 2021**
Hi @DWJ
We've updated our original answer, take a look at the update. :)
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