When undertaking a dev with a intention to sell the GST method for the land you acquire can affect the GST payable at the end which also affects profit. I will demonstrate with an example. Lets say Dad and Son Pty Ltd are proud old builders and decide to build two residential cottages on new land in a new developing suburb. One lot of land is acquired from the land developer and the neighbouring lot (identical size, value) is bought from Mr & Mrs Fink who bought from the developer but due to work issues they must relocate to Hong Kong and sell their land. Their lot is through a local agent. Each lot costs $600,000 Dad and Sons Pty Ltd will construct a $240,000 building on each lot. Each will be sold for $1.1million The developer lot: This land was acquired under the margin scheme. Dad and Son Pty Ltd cannot claim GST on the land purchase and cannot use the margin scheme when they sell because they bought land under the margin scheme. The GST payable on the sale will be a net $78,182 and the profit on this lot will be $181,818 The non-developer lot : The land was acquired without the margin scheme and the vendor is not registered for GST. Dad and cannot claim any GST on the land (as there was none) but when they sell they can use the margin scheme. The GST payable on the sale will be a net $23,636 and the profit on this lot will be $236,364 So the margin scheme has made a massive 30% difference to profit. When buying land for a development avoid buying land under the margin scheme.