Hi,
Only just discovered this website and it seems like its going to be very helpful.
I am about to start my first small unit developement and have a couple of queries about GST when I sell the units.
Do I pay GST on the profit or on the sale price. i.e If one unit costs 200,000 to build and I sell for 250,000 will I be charged GST on the 250,000 sale price or only on the 50,000 profit.?
Also, if I were to hold onto all units and rent them for a year, would this avoid GST as they are no longer new?
Any help and advice on this would be appreciated.
Cheers
Hi
I think the GST will be on the full sale price, but you should be able to claim a refund of GST on the materials you purchase for the house.
Don't think you can avoid GST unless it was your intention to hold onto the properties long term.
There are some good documents on this available at http://www.bantacs.com.au
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
also look up margin scheme for GST.
As for holding, it is my understanding that if you sell a new building in under 5 years then GST is payable even if it is rented out, but check with your accountant and if you get a different answer, please post it.
Mick
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