Home > Updates > Window closing to take assets out of the GST net
In 2023 new GST rules were introduced which allow GST registered taxpayers who purchase an asset that is not acquired or used principally for business use, to choose to keep the asset out of the GST net, rather than making annual apportionment adjustments.
A typical scenario is a GST registered person who uses part of their main home as a home office, or for business purposes.
The new rules also introduced a window which allows assets purchased prior to 1 April 2023, and which had been included in the GST net, to be taken out of the GST net if certain criteria is met. Taking the asset out of the GST net means GST would not be payable when the asset is eventually sold, which in some cases could be significant, especially in relation to appreciating property prices.
This window to take qualifying assets out of the GST net is closing on 31 March 2025.
If you have claimed GST on the purchase of an asset, but the asset was not acquired or used principally for GST taxable use, you can elect to take the asset out of the GST net if:
GST can still be claimed for operational costs, to the extent that these costs are incurred to make taxable supplies.
If the above criteria are not met, the asset remains in the GST net. The usual GST apportionments will be required, and when the asset is sold, GST will be payable.
If you have an existing asset that you think might qualify to be taken out of the GST net, get in touch with a Nexia Tax Advisor or your usual Nexia Advisor to see if you meet the criteria to remove the asset out of the GST net by 31 March 2025.
Nexia New Zealand is a leading full-service chartered accounting and business advisory consultancy firms, offering the full range of accounting, business advisory, corporate advisory, tax, audit, and insolvency services.
Nexia New Zealand has four offices throughout New Zealand: Victoria Street in Christchurch, Albany on Auckland’s North Shore, Newmarket in the Auckland CBD and Hastings in Hawke’s Bay.
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