Do Commercial Property Bonds Include GST?

Tenants of commercial and industrial property are usually required to pay bonds to a landlord before they are granted access to the property. The amount of the bond is negotiated and agreed upon in the lease. A common question in regards to commercial real estate is whether the bond amount should include GST or not.

When Crew Commercial negotiates a sale or lease of commercial property in Brisbane or Gold Coast we usually include GST in the bond calculations. This is because a bond is held to safeguard against unpaid rent or pay for a contractor to fix damage to the property; in the event either of these events occurs GST would be payable, therefore the bond amounts are usually calculated inclusive of GST.

When we consulted a reputable accountant on this issue they advised us regardless of whether Commercial Property Bonds are calculated inclusive or exclusive of GST, GST is not claimable when the tenant pays the bond as it is a security payment. The GST component is only claimable if the bond is forfeited, as it essentially becomes income to the landlord from an accounting perspective.

By providing clear and accurate information about GST inclusion in bond calculations, Crew Commercial aims to assist their clients in making informed decisions when entering into commercial property leases. As specialists in negotiating commercial property transactions in Brisbane and Gold Coast, their expertise in dealing with these matters ensures a smooth leasing process, promoting a positive relationship between landlords and tenants throughout the lease term. If you have any further questions or need assistance with your commercial property needs, don't hesitate to contact our experienced team of commercial property experts.

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