Hi guys,
I have some questions in regards to subdividing my land in Doncaster and putting 3 townhouses on it. Here is the scenario after speaking to all the parties (builders, architects etc...)
1) Big block of land was purchased for $840k (around $890 after all the misc costs) few years ago.
2) Wants to sell each townhouse for around $900k
3) Construction cost is 990k (inclusive of GST) for all the units combined.
4) The property is under our personal names and we have been advised to registered a company and GST to carry out the development.
Let's say at the end we really managed to sell the luxury townhouses for $2.7m in total. How is the GST we need to pay calculated? Is it something like this?
Land cost - 890k
Construction cost and Sales commission - 1.05m
Sales - $2.7m
Margin - $1.81m
GST on Margin - 165k
GST on Construction and Sales commission - 95k
Final GST payable = 165k - 95k = 70k
Gross income = $2.7m - $1.94 (890k + 1.05m) = 760k.
Net income = $760k - $70k = $710k
Are my calculations correct? Seems to be a bit odd to me. Can someone kindly advise? If it is not feasible, we will develop the land later. Thank guys.
I have some questions in regards to subdividing my land in Doncaster and putting 3 townhouses on it. Here is the scenario after speaking to all the parties (builders, architects etc...)
1) Big block of land was purchased for $840k (around $890 after all the misc costs) few years ago.
2) Wants to sell each townhouse for around $900k
3) Construction cost is 990k (inclusive of GST) for all the units combined.
4) The property is under our personal names and we have been advised to registered a company and GST to carry out the development.
Let's say at the end we really managed to sell the luxury townhouses for $2.7m in total. How is the GST we need to pay calculated? Is it something like this?
Land cost - 890k
Construction cost and Sales commission - 1.05m
Sales - $2.7m
Margin - $1.81m
GST on Margin - 165k
GST on Construction and Sales commission - 95k
Final GST payable = 165k - 95k = 70k
Gross income = $2.7m - $1.94 (890k + 1.05m) = 760k.
Net income = $760k - $70k = $710k
Are my calculations correct? Seems to be a bit odd to me. Can someone kindly advise? If it is not feasible, we will develop the land later. Thank guys.