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  • Getting the margin scheme right

    If your clients choose to use the margin scheme when selling property, they must be eligible before a property is offered for sale.

    Your clients could be eligible if:

    • they're selling new property as part of their business and they're registered for GST
    • there is a written agreement before settlement between the supplier and purchaser to use the margin scheme – this could be part of the contract.

    Avoid the common errors suppliers make when selling property using the margin scheme. Remind your clients suppliers must:

    • meet the eligibility criteria
    • calculate the margin correctly
    • report the amount of the margin on the sale at G1 Total sales – not the full amount of payment received.

    Our GST property decision tool can help determine your clients' eligibility and will also calculate the margin.

    When your clients purchase property using the margin scheme, they:

    • can't claim GST credits for the sale
    • don't report it on their activity statement.

    If your clients used the margin scheme incorrectly, it is important to adjust their next activity statement or lodge a voluntary disclosure.

    See also:

    Last modified: 16 Nov 2020QC 64172