I have recently read an article about renovating and selling. In the article it mentioned i will have to charge GST when i sell if i did a substantial renovation. This is when i got a bit lost.
Does it mean that if i sell the property for say $350,000, technically i only get $315,000? As 10percent is GST??
Does anyone out there know about this??
10% GST is payable on most things – on exception is second hand residential property. If it is new property, such as a new house and land then 10% of the sale price goes to the Govt. But, if you register for GST then you can claim the GST that you have paid on the construction materials etc. So it is not that bad, but still hurts.
With renovations I think it may depend on the extent of the make over, if it substantially a new property then it maybe that GST is payable on the sale. But the land will not be new, so I assume the GST would be only on the building compenent, and then you should be able to claim GST on materials etc.
It is a very complex and confusing issue, and I don't understand it at all.
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
Thanks Terry!! Appreciate your help
http://www.ato.gov.au/individuals/content.asp?doc=/content/57402.htm
http://www.ato.gov.au/businesses/content.asp?doc=/content/19998.htm&page=1#P942_114024
http://www.ato.gov.au/businesses/content.asp?doc=/content/19998.htm&page=1#P1016_124833
Quite frankly I find it difficult to tell where the line is drawn between Example 1 and Example 4
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