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  • Applying the margin scheme to GST at settlement

    GST at settlement changes mean that certain purchasers of new residential premises or potential residential land will be required to withhold an amount from the price of the sale for payment to us.

    If the margin scheme applies to your sale you must notify the purchaser of the withholding amount, this is 7% of the contract price – do not include cents.

    The GST at settlement legislation has not changed the way the margin scheme applies or operates, including business activity statement (BAS) reporting. You must report all property sales at label G1 and the GST on sales at label 1A on your BAS.

    Once your BAS is processed credits are transferred to your activity statement account from your GST property credits account.

    If you are in business and are registered for GST you may be eligible to use the margin scheme. If you are not in business but your property transactions are more than the $75,000 GST registration threshold and your activities are regarded as an enterprise, you may be required to register for GST.

    The application of GST to property-related transactions can be complex. Your registered tax or BAS agent can provide advice on GST treatment for property transactions.

    See also:

      Last modified: 26 Nov 2018QC 57463