Mixed-use asset rule change explained

April 1 marks a significant change in the GST tax treatment of mixed-use assets.

Taxpayers can claim 100% of GST for expenses relating to the income-earning use of a mixed-use asset, for example, the cost of advertising a holiday home online.

However, working out GST claims for expenses relating to both the income-earning and private use of the asset has been more difficult to establish. In the past, a complex calculation has been needed to apportion GST expense claims relating to both income-earning and private use.

As of this month, GST calculations for mixed-use assets have been simplified. You no longer need to use the old method and general apportionment and adjustment rules will apply instead.

Remember, if you have a mixed-use asset, such as a boat, bach, or plane, please keep records on how and when it is used for business or private purposes.

If you’re unsure about these changes, give your Client Manager a call.