Change in use of new residential premises

There is often confusion about what entitlements there are when you rent out rather than sell new residential premises that you had originally constructed for sale.

You must correctly account for GST if you construct new residential premises for sale and rent them out or live in them instead of selling them. This usually means there has been a change in the use of the premises (there has been a change in their creditable purpose or the amount you use them in your business).

In these situations, you must make an increasing adjustment to repay some of the GST credits you have claimed on purchases, such as the construction costs and cost of purchasing the property.

Find out about:

  • GST and property adjustments GSTR 2009/4 Goods and services tax: new residential premises and 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.
    Last modified: 05 Jul 2016QC 21948