Reporting mistakes on GST and property transactions

Change of your business use or the 'creditable purpose' of your property

If you are a property owner, developer or are registered for GST and you use your property differently from the way you planned to, you may have to report a GST adjustment.

For example, if you decide to rent out rather than sell new residential premises, you have changed the business use or the 'creditable purpose' of your property. This means you may have an increasing adjustment that you must record in your June activity statement.

An adjustment is required even if you intend to sell the premises at a later date or are in the process of marketing the property.

If you later sell the new residential premises, you may then have a decreasing adjustment.

How to report a mistake

If you find you have a creditable purpose adjustment for property transactions that you did not report, you can let us know by completing a Voluntary disclosure rather than revising your activity statement.

We have advised the community via our Compliance Program 2012-13 that we will undertake audits in this area.

If you take this opportunity to review your activity statements and report any mistakes voluntarily, you will not have to pay any shortfall penalties and any general interest charges (GIC) will be reduced to the base rate.

This applies if:

your adjustment relates to property
you tell us about your mistake before we tell you we will conduct an audit
what you tell us relates to an honest mistake.

If we find mistakes as part of an audit, shortfall penalties can be as high as 90% of your additional liability.

To discuss a mistake you have made with us:

phone us on 13 28 66.

More information

For more information refer to:

GST and property (NAT 72957) - a guide that explains how GST applies to GST property sales and transactions
GST and the margin scheme (NAT 15145) - a guide that outlines how you can use and apply the margin scheme
Making an adjustment on your activity statement (NAT 11035)
Issue 4 - How does Division 11 (Creditable Acquisitions) interact with Division 129 (Changes in the extent of creditable purpose)? of the Property and Construction Industry Partnership Issues Register
GSTR 2009/4 Goods and services tax: new residential premises and adjustments for changes in extent of creditable purpose.
GSTR 2006/4 Goods and services tax: determining the extent of creditable purpose for claiming input tax credits and for making adjustments for changes in extent of creditable purpose
GSTR 2000/24 Goods and services tax: Division 129 - making adjustments for changes in extent of creditable purpose
the Taxpayers' charter - for information on your rights and obligations.

Last Modified: Friday, 5 April 2013

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We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations.

If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take.

Some of the information on this website applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information.

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