GST Margin Scheme - quick question on calculating the margin

If Bill bought a block from Alice for $1m, built two townhouses on the block for $600,000 plus GST of $60k, and subdivided it into two equal blocks, how much GST would he pay if he sold one townhouse for $1,000,000. Assume the GST margin scheme applies.

Do selling costs come into the equation e.g. real estate agents' commission and marketing costs of $25,000?

Or is the margin simply the selling price of $1m less the attributable cost of the land of $500k, meaning GST of 1/11th of the margin ($1m - $500k = $500k) is payable? So $45.45k?

How is the profit on sale determined? Is the net GST cost ($45.45k paid less $30k claimed on construction = $15.45k) factored in?

 

If he bought the land for $500k it would be about $45k

Profit is just the sale price less the costs, including GST.

 

The costs don't include build costs etc? I thought were included in profit calcs.

 

Sale price less portion of land price / 11.
That is gst on the sale (margin).
GST on other costs (construction) claimed along the way. Margin is for the remittance of the GST on the sale l.

 

Sale price outright, or net of agent's commission?

Construction costs are excluded.

 

Refer to bold answers above

Profit is determined by taking the NET sales proceeds of $1m less $45454 = $954,546
Deduct the 50% share of the cost of the land, build etc
Ensure you take 50% of total costs and REDUCE it for the GST claimed in B above.

Profit is calculated using GST exclusive numbers