New Zealand has a distinctive rule letting GST-registered dealers claim an input tax credit on secondhand goods bought from private, unregistered sellers — even though no GST was actually charged on the purchase.
Last updated: June 2026
When a GST-registered business buys secondhand goods from a private individual who isn’t GST-registered, no GST is charged on that purchase, since the private seller isn’t a taxable supplier. Without a special rule, the business would then have to charge full GST when reselling the item, without ever having claimed any GST back on the original purchase — effectively taxing the same value twice, since the item likely bore GST when it was originally sold new. New Zealand’s secondhand goods rules address this by letting the registered buyer claim a notional input tax credit on the purchase, calculated as if GST had been included in the price paid.
This generally applies to GST-registered businesses (dealers, resellers, and similar) purchasing secondhand goods from non-GST-registered sellers, where the goods are acquired for the purpose of making taxable supplies (i.e. you intend to resell them or use them in your taxable business activity). Specific record-keeping requirements apply, since you need to substantiate the purchase to support the credit claimed.
This rule is commonly relevant for secondhand car dealers, antique and collectibles dealers, pawnbrokers, and similar businesses that regularly purchase goods from private individuals rather than GST-registered wholesalers. Getting the input tax credit calculation right on high-value items like vehicles can meaningfully affect your GST position, so accurate record-keeping on each purchase matters.
You generally need appropriate records of the transaction, including confirmation the seller isn’t GST-registered (a private sale), to support your input tax credit claim if reviewed.
No, this specific rule is for purchases from non-GST-registered private sellers — normal input tax credit rules with a proper GST invoice apply when buying from a registered supplier.
Secondhand car dealers, antique and collectibles dealers, pawnbrokers, and similar resellers who regularly buy from private individuals rather than registered wholesalers.
Yes, broadly the credit is calculated as a notional GST-inclusive component of what you paid, even though the private seller didn’t actually charge or collect any GST.
Yes, this input tax credit mechanism specifically applies to GST-registered businesses — it isn’t available to unregistered sellers or buyers.
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