I get a stack of questions from Somersofters about CGT (or the lack of it !!)and tax on a development. That also leads to the inevitable GST issue. Some are stunned when I explain GST applies. Then are pleased to hear about the margin scheme.
Thought it worth a quick post....
GST Ruling 2008/7 and 2006/8 discuss the margin scheme. It allows some developers a way of paying GST on their profit rather than the sale price of the property. However it is based on the LAND acquired and the FINAL selling price. Basically as a rule of thumb you save 1/11th of the land value...So if land costs $1.1m you can save 100K. That's a real crude example.
Margin scheme can get complex and a good example of an area where advice is a must. Some land isn't eligible. Some land has special rules. etc. Sometimes you wouldn't use it. (eg commercial property)
Thought it worth a quick post....
GST Ruling 2008/7 and 2006/8 discuss the margin scheme. It allows some developers a way of paying GST on their profit rather than the sale price of the property. However it is based on the LAND acquired and the FINAL selling price. Basically as a rule of thumb you save 1/11th of the land value...So if land costs $1.1m you can save 100K. That's a real crude example.
Margin scheme can get complex and a good example of an area where advice is a must. Some land isn't eligible. Some land has special rules. etc. Sometimes you wouldn't use it. (eg commercial property)