I have a GST question. How is GST treated on a New Residential development? If an apartment is sold off the plan for $800k. Given there has been GST paid in the construction costs , does the developer still need to pay the GST?

Justin,

I'm no Accountant & he will be able to give a firm answer on that one, but from what I've seen, the developer will may GST on the sale of the properties, but claim back GST on the construction costs, ex council fees/contributions & anything else that is GST free).

Check it with your Accountant though and/or hopefully an Accountant will reply here to clarify (and correct me if I'm wrong).

Hi Justin,

There are a number of issues to consider here.

Generally when there is a first sale of a residential property there is GST payable on that sale.

The calculation of that GST would generally be based on the margin scheme which is rather complex and requires a detailed analysis of the facts.

The calculation of GST payable (on sales) under the margin scheme effectively gives you an input credit for the proportate value of the residential land that is contributed to the development.

Each development is different. Specific facts would need to be discussed.

All the best with your project.

Kind regards,

David.