When you build a new residential property the builder charges GST. Can we claim the GST back on this property if it was purpose built from new for residential investment purposes?
To what effect? Residential property is input taxed so there is no benefits to be gained. Check the ato website or your accountant for clarification.
For example, the builder charges me $200k to build my new property + $20k GST, I want to be able to claim back the $20k. Can this happen?
Very little chance unless you owned it under a company & you were registered for gst. If you were able to take advantage of it in this way, you’d then be liable for payment of gst upon sale of the property ie 1/11th of sales price or whatever via the margin scheme & cgt at 30%. ie: no advantage.
You can claim back the GST IF:
1) You are registered for GST
2) You are running a property development business.This can be in your own name, it does not have to be under a company structure.
The downside of claiming the GST when you are building is that you would be required to PAY GST when you sell, reducing your profits.
If you are building for your own use, or to rent out the property, then you can not claim the GST on building.
Dan42 wrote:You can claim back the GST IF:1) You are registered for GST
2) You are running a property development business.This can be in your own name, it does not have to be under a company structure.
The downside of claiming the GST when you are building is that you would be required to PAY GST when you sell, reducing your profits.
If you are building for your own use, or to rent out the property, then you can not claim the GST on building.
Unless the developer has used the margin scheme and in which case you cannot claim back the GST.
omegapartners wrote:Dan42 wrote:You can claim back the GST IF:1) You are registered for GST
2) You are running a property development business.This can be in your own name, it does not have to be under a company structure.
The downside of claiming the GST when you are building is that you would be required to PAY GST when you sell, reducing your profits.
If you are building for your own use, or to rent out the property, then you can not claim the GST on building.
Unless the developer has used the margin scheme and in which case you cannot claim back the GST.
I understood the question to be that the OP was paying a builder to build the property, not buying a brand new, completed property from a developer.
My point was if they are paying a builder to build, they can claim GST if they are intending to develop and sell etc.
But you are right, if they have bought a completed new residential home, and the develop has used the margin scheme, then there is no claim for GST allowed.
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