It’s a common belief among business owners that registering for GST early is a smart move, a sign you’re “legit,” or a shortcut to claiming back setup costs. But GST isn’t a refund scheme. In some cases, registering too soon can complicate your cashflow, create extra admin and even lead to a tax bill you didn’t expect. 

Here’s what to weigh up before ticking that box on your IRD registration. 

The basics: who must register for GST? 

You’re legally required to register for GST if: 

• Your business earns (or is likely to earn) more than $60,000 in turnover over a 12-month period. 

• You’re charging GST on goods or services. 

• You’re running a taxable activity and importing goods worth more than $1,000. 

Outside of those triggers, registering for GST is optional. And that’s where the voluntary registration question comes in. 

The common reasons people register early 

There are a few situations where early registration might be recommended: 

• Startups with high setup costs: If you’re fitting out a new practice, buying gear, or paying for upfront marketing, registering early can let you claim back GST on those expenses even before you’ve earned a cent. 

• Professional service providers: If you’re a lawyer, consultant, or creative working with GST-registered clients, you might assume it’s simpler to just charge GST like everyone else. 

• Rental property owners: Especially in the short-term accommodation game (like Airbnb), some owners voluntarily register thinking they’ll get a chunk of GST back on a reno or fitout. 

But here’s the kicker: that refund often comes with strings attached. 

When early GST registration works 

Voluntary registration can make sense if: 

• You’re running a genuinely commercial business that will cross the $60k threshold soon 

• Your customers are mainly GST-registered businesses, so passing on GST isn’t an issue 

• You’re making zero-rated exports or services to offshore clients and can claim back GST without collecting any 

For example, a physiotherapist setting up a new clinic may spend $50,000 on equipment and fitout. Registering early means they can claim $6,500 back in GST — a helpful boost to early cashflow. 

When early registration can backfire 

Here’s where early GST registration can bite: 

• Your clients aren’t GST registered – which means they can’t claim back the GST you charge, making you 15% more expensive overnight 

• You’re earning under $60k – and may stay that way, so registration just adds admin and complexity 

• You’re doing short-term residential rentals – residential rent is exempt from GST, but if run short-term rentals, it’s more complex. You might end up paying GST on the sale of the property later, even if it’s mostly a family home. 

A word of warning for rental property owners 

GST and property is one of the most common areas we see people get tripped up. Just because you’re listing your Airbnb or Bachcare property doesn’t mean registering for GST is the smart move. 

When the property sold and has been part of a GST-registered business, you will have to pay GST on part of the sale price. That can be a nasty surprise – especially if the value has increased. 

If you’re mixing short-term and long-term rentals, or you own multiple properties, the structure really matters. In some cases, setting up a separate entity just for the GST activity is the cleanest solution. 

Read more about Airbnb and GST 

Read more about tax implications of short term rental income 

The admin cost of being GST registered 

Even if you’re under the threshold, GST registration means: 

• Filing returns every two or six months 

• Separating out GST in your accounting system 

• Charging GST on invoices and issuing tax invoices 

• Being responsible for correctly claiming or paying GST 

It’s not huge work, especially with a good accountant, but it’s still work. Make sure you’re getting value from that effort. 

So should you register early? 

There’s no one-size-fits-all answer. But in general: 

• If you’re a startup with high upfront costs and confident revenue projections, registration may make sense 

• If your customers are consumers, and you’re under the $60k threshold, you might want to hold off 

• If you’re in the property game, talk to us before registering, it’s rarely straightforward 

Need a second opinion? 

Whether you’re launching a new business, renting out a property, or just unsure whether GST is worth the hassle, we can help you weigh it up. There’s no benefit to registering early unless it’s part of a bigger plan. 

Let’s make sure it’s working in your favour.