Hi all,
I have recently purchased a a parcel of land that requires the development of 4 terraces (1 building) and was done with a shelf company.Progress payments have begun to the builder and these will eventually amass a total of $790,000.
Can I claim the GST component on my quarterly BAS?
This will be approximately $70,000 GST in payments to the builder.
If I can claim this money on a quarterly basis, does the refund effect me when I sell the property?
Thankyou,
Budding InvestorI believe you can claim it if you intend selling it once it’s built and then you pay GST on the Sale price.
PK
You will claim your input credits each quarter for the amount paid out on construction or other expenses.
The sale price will include GST calculated using the margin scheme and then of course you will have CGT on the profit.
Cheers Richard
Ph: 07 3720 1888
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Richard Taylor | Australia's leading private lender
Richard,
That is assuming the purchaser agrees to the margin scheme being used. Assuming that the properties are going to be used for residential purposes then the purchaser is probably not seeking an input tax credit and therefore won’t be concerned whether the margin scheme is applied or not.
If however the terraces are used for commercial purposes then the purchaser is not going to want the margin scheme to be applied as they will not receive an input tax credit. Acquisition of property acquired where the margin scheme has been used does not entitle the purchaser to an input tax credit.
Will need to firstly determine the purpose of the terraces i.e. residential or commercial and whether you should apply the margin scheme or not.
Given that this is a property development the sale will be on revenue account not on capital account and therefore the CGT provisions are not relevant.
hi budding investor
yes coastymike is right but I build using the margin scheme on most of my developments and its monthly I’ve exchanged and already put in for the gst credit before settlement not sure if we get it some times you do, sometimes you don’t.
It depends on what you are building and what you are going to do with end producthere to help
If you want to get involved in some of the projects I’m involved in email to [email protected]
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