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  • Property development, building and renovating

    If you're renovating one or more properties you need to work out if you are a personal property investor, engaged in a profit-making activity of property renovations, or carrying on a business of renovating properties. If you are 'property flipping' or 'renovating for profit' there could be tax implications.

    You may need to register for GST if:

    • you build new residential premises for sale and the total income from your property development activities is more than $75,000 per year, and
    • these activities are regarded as an enterprise.

    Your activities may be regarded as an enterprise if, for example, you buy vacant land to subdivide with the intention to sell for profit, or you develop new residential premises and sell them. Even a one-off property transaction may be an enterprise.

    If you are registered – or required to be registered for GST – you are liable to pay GST on your property sale. You can generally claim GST credits for your construction costs and purchases related to the sale.

    Certain purchasers of new residential premises or potential residential land are now required to withhold an amount from the contract price and pay it to us. This change started on 1 July 2018.

    Businesses in the building and construction industry need to report to us each year the total payments they make to each contractor for building and construction services.

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    Last modified: 26 Oct 2018QC 23643