Should you Register for GST?
Should you Register for GST?
GST and Lifestyle Blocks: What You Need to Know
When Selling a Lifestyle Block
When Do You Have to Register for GST?
What About Voluntary Registration?
What Does GST Registration Mean for Admin?
What Counts as a “Taxable Activity”?
You have finally found the lifestyle block of your dreams and you’re ready to make an offer and move on to the property. Life is suddenly busy as you arrange finance, organise packing and moving, and of course you have a brand new life to research – whether it’s four footed and furry, or grown in the ground. To top it all off, people keep bringing up the subject of GST.
GST and Lifestyle Blocks: What You Need to Know
GST (Goods and Services Tax) can be confusing at the best of times, especially when you're up to your elbows in moving boxes and paddock plans. But if you’re buying or selling a lifestyle block, GST can have major implications, especially for the sale price and how it’s structured.
If you're already registered for GST through another business, this won’t be unfamiliar ground,but it’s worth double-checking your records and talking to your accountant to make sure any relevant expenses or claims are properly accounted for with the new property.
When Buying a Lifestyle Block
If you're not registered for GST and the property is advertised as plus GST, stop and get advice. “Plus GST” means the price listed does not include GST, and the vendor is expecting to add 15% on top, which is potentially tens of thousands of dollars.
To avoid any surprises:
Insist that your offer is GST inclusive unless you’re registered and planning to claim GST back.
Clarify the GST treatment in the sale and purchase agreement. Have your lawyer or accountant review the contract wording carefully.
In most cases, if the property is just a home with a bit of land and no ongoing taxable activity (like farming or forestry), the sale won’t involve GST. But if it includes a registered business, or significant income-earning activity, GST may apply.
Some sales are zero-rated for GST. This applies when:
Both buyer and seller are GST registered
The property includes land used for taxable activity (e.g. farming)
The buyer intends to use it for a taxable activity
Zero-rating doesn’t mean there’s no GST involved, it means GST is charged at 0%, and both parties must still report the sale in their GST returns. You’ll still want professional advice, especially if buildings, stock, or equipment are included.
When Selling a Lifestyle Block
If you’re selling a block and you are GST registered, you must consider whether the sale involves a taxable supply. If you’ve claimed GST on fencing, sheds, or equipment, and you now sell the property (or part of it), GST may be payable on the sale price.
Options include:
Charging 15% GST, if the buyer is not registered
Zero-rating the transaction, if the buyer is GST registered and using the land for a taxable purpose
Again, clear contract wording and professional advice are essential. You don’t want to be caught out needing to return GST on a transaction because the paperwork wasn’t watertight.
When Do You Have to Register for GST?
In New Zealand, you must register for GST if:
You expect your turnover (total sales, not profit) to exceed $60,000 in the next 12 months. That’s an average of $5,000 a month.
You’re charging GST on your products or services, then yes, you must register.
You reach the end of the year and discover your turnover has exceeded $60,000, even if you didn’t expect it to. The IRD can still require you to register and may backdate your liability.
In other words: if you’re earning or planning to earn serious income from your block, GST registration isn’t optional,it’s a legal obligation.
What About Voluntary Registration?
Even if you’re under the $60,000 threshold, you can choose to register for GST. This is called voluntary registration, and it can be useful if:
You’re planning to grow the business side of your block
You want to claim GST on large start-up expenses (e.g. fencing, sheds, equipment)
You want to appear more ‘business-like’ to suppliers and customers
But voluntary registration also brings paperwork. You’ll need to submit regular GST returns and meet IRD’s record-keeping requirements, so you need to weigh the admin against the benefits.
What Does GST Registration Mean for Admin?
Registering for GST means you’ll be taking on some regular administrative tasks to stay compliant. Here’s what that looks like in practice:
Keeping good records: You’ll need to hold onto all tax invoices and receipts for anything related to your GST-registered activity. That includes sales, expenses, and purchases.
Tracking your finances: Maintain up-to-date records of income and outgoings. This can be with spreadsheets or accounting software like Xero or MYOB.
Filing GST returns: You’ll be required to file GST returns with IRD. You can choose to do this:
Monthly
Every two months (the most common for small blocks)
Every six months (if your turnover is under $500,000)
Paying (or claiming back) GST: You’ll work out how much GST you collected on your sales and how much you paid on your expenses. The difference is either paid to IRD or refunded to you.
It’s not overly complex but it does require consistency and good systems. If paperwork isn’t your strong point, it’s well worth involving an accountant from the start.
GST and Capital Assets
One common point of confusion: selling capital assets like a tractor or milking equipment does not count towards the $60,000 threshold. IRD doesn’t consider one-off sales of capital items as part of regular turnover, but it’s still wise to check with an accountant. Always.
What Counts as a “Taxable Activity”?
IRD defines a taxable activity as something that is:
“Carried out continuously or regularly by a business, trade, manufacturer, professional, association or club, supplying goods or services for consideration - even if not for profit.”
In simpler terms, if you’re consistently rearing calves, shearing sheep, selling firewood, or growing and selling produce, and it earns $60,000 or more a year, you are likely running a taxable activity.
Final Thoughts
GST registration is just one more thing to think about as you step into lifestyle block ownership,but it’s an important one. The key is to understand your intentions and income potential, get proper advice, and stay ahead of the paperwork.
If in doubt, call IRD or speak with a rural accountant. It's much easier to plan ahead than to get caught out later.
Note: This article does not constitute financial advice. For individual advice you should consult an accountant.
Want more practical guidance for your block?
Take a look at our course: What You Need to Know Before You Keep Livestock
Or download our free guide: 10 Things I Wish I’d Known Before I Bought My Block
