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Nomes1977(Newbie)Newbie
17 Jan 2025

Our Company is purchasing a commercial property and the solicitors have completed the settlement statement to include the council rates that encompasses the period of purchase. They have then added this to the purchase price to provide an adjusted purchase price (property amount plus our share of the rates) which has then been used for the calculation of GST. While it is only a small amount in our case, I am wondering why we are being charge GST on our share of the council rates when these do not attract GST?

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4 replies
499 views
4 replies

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Most helpful reply

MPrivate(Superuser)Superuser
17 Jan 2025

Hi Nomes1977,

It is difficult to tell without seeing the documents. Were rates paid part of the rent which is being apportioned? Best to query with the solicitors.


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Most helpful reply

MPrivate(Superuser)Superuser
17 Jan 2025

Hi Nomes1977,

It is difficult to tell without seeing the documents. Were rates paid part of the rent which is being apportioned? Best to query with the solicitors.


Nomes1977(Newbie)Newbie
17 Jan 2025

Hi MPrivate,

There was no rent for this property. It is property that is zoned industrial and was owned by another Company then sold to our Company. The Council rates get apportioned at settlement for how many days each Company owned the property within the period. There is no GST payable on Council rates, so I don't understand why it is included in the GST calculation for the property. The solicitors are the ones telling me that it is included and just say "this is how we do it" and reference some parts of the contract which doesn't really answer my question either; hence why I am seeking answers from the ATO and ATOCommunity.

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Why are adjustments at settlement included when calculating GST for a commercial property? | ATO Community