GST on pre sales versus post

Just making sure i understand.

Post construction, sale within 5 years = GST on full sale price, e.g. $500k sale less $250k build = $50k GST less $25k GST credit.

If we sell during construction then are the calcs the same or does it reduce?

 

hmm continued research ...

it appears i can most likely use the margin scheme.
https://www.ato.gov.au/business/gst/in-detail/your-industry/property/gst-and-the-margin-scheme/

if anyone wants to chime in i would love some examples of what people have done in the past before i get to my specific questions to pose to my accountant.

 

If its a resi then the margin scheme may reduce the GST by 50% or so. Also reduce that for the GST on the build that can be reclaimed also. So GST can be a substantially lesser impact than many assume.

Also one issue to ensure you understand is how the tax on profit will work. Its highly likely given your question that CGT will not be a issue and the GST exclusive costs will be needed to determine profit which may be subject to income tax (no discounting).

Important when running numbers that accurate numbers are used so there are no surprises.

Of course you may be aware that if you sold in say yr6 there would be no GST to pay but you cant claim any on build etc. Also the depn and Cap allowance deductions would be based on the GST inclusive costs rather than ex GST

See how it all intertwines ??

 

Cheers, yes a fair bit of heavy reading. Typically i try and get down to 2 or 3 scenarios then take them to the accountant, builder, planner, etc... if i walk in to them with my head all over the place then i will get charged a mint while sorting out the options.

Up until now we had been very slowly turning with no intention of selling but serviceability is damn tight at the moment so we need to start a few projects with an ability to get in and out and factor the taxes into it.