GST Rules for Property Developers and Builders

Property development GST is complex. If you build new residential premises to sell, you are generally liable for GST on the sale.

The Margin Scheme

Usually, GST is 1/11th of the sale price. However, if you use the Margin Scheme, you only pay GST on the difference between what you paid for the land and what you sold the property for. This can save you tens of thousands of dollars.

GST at Settlement (Form 1 & 2)

Since 2018, purchasers of new residential land must withhold the GST amount at settlement and pay it directly to the ATO. As the developer, you must provide the purchaser with written notification (Form 1) before settlement.