· GST and the margin scheme
The margin scheme is a way of working out the GST you must pay when you sell property as part of your business. You can only apply the margin scheme if the sale of the property is taxable.
As a seller you must have made a written agreement with the purchaser, before the settlement date, to sell the property under the margin scheme.
If you purchase property where the margin scheme was applied to the sale, you cannot claim a GST credit for the GST included in the purchase price.
If you were charged the full rate of GST when you originally purchased a property, the margin scheme can’t be used in selling the property. Generally, if you were charged the full rate of GST when you purchased a property as part of your business you would have claimed the GST back.
For further information about the margin scheme contact ATO or your Tax Agent
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GST on low value imported goods
From 1 July 2018, Australian goods and services tax (GST) will apply to sales of low value goods imported by consumers into Australia.
Businesses that meet the registration threshold of A$75,000 will need to:
- register for GST
- charge GST on sales of low value imported goods (unless they are GST-free)
- lodge returns to the ATO.
These businesses may be merchants who sell goods, electronic distribution platform operators or re-deliverers. For goods imported in a consignment over A$1,000, any GST, customs duty and clearance charges will be charged to the importer at the border under existing processes.
This new law is designed so that businesses:
- will not charge GST on a sale when GST will be charged at the border, because an item is
- worth over A$1,000
- a tobacco product, or
- alcoholic beverage
- will not need to charge GST on a sale if it is clear that multiple goods will be shipped to Australia in one consignment worth over A$1,000 – GST will be charged at the border instead.
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· GST and property
GST only applies to the sale of certain property types (for example, vacant land, new residential premises, commercial premises) if the vendor is registered or required to be registered for GST purposes.
Even if you are not in business, if the turnover from your property transactions and other transactions are more than the GST registration threshold and your activities are regarded as an ‘enterprise’ you may be required to register for GST (for example, if you buy land with the intention of developing it for immediate resale at a profit).
Source: ATO website