The ATO provides guidance on adjustments required where there is a change in creditable purpose. In both examples given, Bob and Kevin are registered for GST. The example of Kevin is: Kevin is a GST registered carpenter. Kevin decides to build residential premises that he intends to rent out for at least 10 years. As he has always planned to rent the property, Kevin does not claim any GST credits on his costs to construct the premises. Three months after Kevin originally rents the property he gets an offer from a prospective purchaser to buy the property that is too good to refuse. Kevin decides to sell the property rather than rent it out for the long term. GST will be payable on the sale of the premises as they are still considered 'new residential premises'. By making a taxable sale of the premise, Kevin has used the premises differently to using the premises to make an input taxed supply as he originally planned, and accordingly, he will need to make a decreasing adjustment for some of the GST credits he did not claim. However, what if Kevin is not GST registered and not a carpenter. Since the construction and subsequent rental of residential property is not subject to GST, does Kevin need to be registered when he decides to build the residential premises? If so, why, or if 'it depends', under what circumstances? As, in the example, if he changes his mind and sells one or more of the premises as “new residential premises” (ie within 5 years), does he need to register for GST at that time, can he apply the margin scheme to the sale and apply a decreasing adjustment to the GST. ie, can he still claim input credits from the construction costs, even though he was not registered for GST at the time those costs of construction be incurred.