GST status whether you are buying or selling a business or commercial property is an important concern for both parties. Normally, the sale of a “going concern” will qualify for an exemption from GST.
The vendor is liable for GST should the ATO investigate the transaction and find that the exemption did not apply.
Most contracts for sale of commercial property or a business where the going concern exemption is applied will include a “clawback” special condition relating to GST. This means that the purchaser provides an ongoing indemnity to the vendor for any subsequent GST liability arising from the transaction.
So, if you are considering buying a commercial property or business, you should discuss your GST status with your accountant and allow plenty of time for registration before the proposed settlement date.
*This is general advice only. You should consult your professional advisers about your particular circumstances.