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GST Margin Scheme

Discussion in 'Development' started by mrdobalina, 25th Jun, 2015.

  1. mrdobalina

    mrdobalina Well-Known Member

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    Just learnt today (after a meeting with my Accountant), that you need to sign the GST Annexure as part of the Offer & Acceptance in order to get the GST margin scheme.

    Easy thing to overlook which could have big financial impact.
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    That is a bit vague. I assume you are talking about a contract for land? What state?
     
  3. mrdobalina

    mrdobalina Well-Known Member

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    Sorry.... The context is around doing developments, and selling off units within a 5 year period. Where you normally get hit with GST on the sale of the new units, you can claim back the GST via the GST margin scheme.

    Just learnt today it's not automatic, and you need to make sure the buyer signs the GST Annexure as part of the Offer & Acceptance form.

    WA. Not sure if applicable in all states.
     
  4. mrdobalina

    mrdobalina Well-Known Member

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    There is an issue if you're the vendor, who has developed some units and sold them within 5 years.
     
  5. There can also be very logical reasons why you wont (or cant) use the margin scheme. When selling property to a GST registered entity (eg factory units, shops etc) then using the margin scheme may hamper sales. The buyer may want to pay GST and claim it back.

    Like all aspects of dev activities the tax strategies should be identified and planned early so that contracts reflect the best outcomes and help profits and rapid sale.

    A buyer would ensure their contract reflects their plan...ie GF shops sold with bGST and not under MS and apartments above under the MS. Strategies on when to claim GST on build also planned into the project.
     
  6. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Yes, so you only need to use it when you are selling (when you are the Vendor) not when you are buying.

    Never sell without informing your accountant to make sure you do it right :D

    The Margin Scheme is a very powerful tool and will save you money.