For purchase of industrial properties in Singapore, you may choose to purchase under a company’s name or under an individual’s name. You should note that Goods and Services Tax or GST may be applicable on the purchase but would also depend on the profile of the seller of the property. Buyer stamp duty is also applicable for purchase of industrial properties in Singapore.
GST May Be Applicable On The Purchase
GST which is also known as Goods & Services Tax may be applicable for industrial and commercial properties in Singapore. If the seller of the industrial or commercial property is GST registered, GST would be applicable for the purchase.
By being a GST registered company, these companies act as agents for the government and collect goods and services tax on behalf.
Which Companies Are GST Registered
Companies with annual revenue or turnover of a million and above are usually GST registered unless the company is exempted. However, you should note that even if annual revenue does not hit the one million mark, voluntary GST registration may still be possible. When considering whether to voluntarily be GST registered, you should consider the benefits and costs of voluntary GST registration carefully and whether it will benefit your business or whether the pros outweigh the cons.
Also, besides a company or a partnership, a sole proprietor (individual) may also be GST registered.
Purchase Under Company or Individual
If the seller of the industrial or commercial property is GST registered, GST would be applicable for the purchase. In this case, if you were to purchase the property from a GST registered seller using a GST registered company, you would be able to claim back the GST paid.
However, if you were to use a non GST registered company or non GST registered individual name for the purchase, you would not be able to claim back the GST paid for the purchase.
Which is Better
By purchasing using a GST registered company, you would be able to claim back the GST on the purchase. However, you should note that by being GST registered, GST would also be chargeable on goods or services sold or provided by your company unless exempted. Also, if the company is planning to rent out the commercial or industrial space, GST would be chargeable on the rental collected.
On the other hand, if you were to purchase the non-residential property under a non GST registered individual or non GST registered company’s name and if the seller is GST registered, you would not be able to claim back the GST portion. However, if you are planning to purchase the property for investment, GST would not be chargeable on the rental collected since you or your company is not GST registered.
As to whether it is a better idea to use a GST registered company or a non GST registered company / individual name for the purchase, it really depends on whether the pros outweigh the cons of GST registration and what would be your main priorities and your intention for the purchase.
If your company is already GST registered and you intend to purchase a warehouse or factory for own use from a GST registered seller, it may make sense to purchase under your company name since you can claim back the GST portion and also it is for your own company’s use.