Margin scheme

Generally, the amount of GST you must pay on property sales is equal to one-eleventh of the sale price. If eligible, you may be able to use the margin scheme on your property sale. The margin scheme is an alternative way of working out the GST you must pay when you sell property. Under the margin scheme the amount of GST payable on your property sale is one-eleventh of the margin for your sale. You can only apply the margin scheme if the sale is taxable.

The margin is generally the difference between the sale price and one of the following:

  • the amount you paid to purchase the property
  • an appropriate property valuation.

Whether you can use the margin scheme depends on how and when you purchased your property.

If you have purchased property that was sold to you under the margin scheme, you cannot claim GST credits on this purchase.

To work out if you can use the margin scheme on the sale of your property, refer to GST and the margin scheme and the GST property tool below.

Next steps:

See also:

  • GSTR 2000/21 Goods and services tax: the margin scheme for supplies of real property held prior to 1 July 2000
  • GSTR 2006/7 Goods and services tax: how the margin scheme applies to a supply of real property made on or after 1 December 2005 that was acquired or held before 1 July 2000
    Last modified: 05 Jul 2016QC 21960