GST Annexure - Perth Contracts

I will
I do enjoy the mind games and lies these agents play. First offer fell through due to due dilligence not stacking up as the buyer wanted to retain but now im told it fell through due to finance

Also the offer i want to put in is too low and theres a lot of interest and people are getting their finances in order to place an offer today (which was what i was told last sat as well)
 
Im going to buy a dev site and my accountant recommended that i get a signed GST Annexure form when i put in my offer. Is this a seperate form that the RE agent will have with him do we simply write on the conditions of the contact "Subject to margin scheme"?

Why do you need one buying it, unless the Seller is claiming the Margin Scheme and then the Seller will fill out the form.

I can't see the reason how/why you need it from a buying perspective.
 
Why do you need one buying it, unless the Seller is claiming the Margin Scheme and then the Seller will fill out the form.

I can't see the reason how/why you need it from a buying perspective.

Accountant said i needed it when purchasing if i want to claim GST during development.
 
plenty of bad accountants getting around, should be struck off

Hes a pretty big commercial developer. This is what he said.

If the intention is to sell the developments, then you will be entitled to claim GST on construction costs, but on the sale of the properties, GST will also be payable.

If you intend to keep development ( or part of) then the construction costs and any associated costs of development to you retain, you will not be able to claim GST back. As there is no sale, there is also no GST payable.

So ultimately it depends on intention. However your initial intention may also change by the end of the development/construction, and that?s fine, so adjustments for GST can be made at this point
 
Hes a pretty big commercial developer. This is what he said.

If the intention is to sell the developments, then you will be entitled to claim GST on construction costs, but on the sale of the properties, GST will also be payable.

If you intend to keep development ( or part of) then the construction costs and any associated costs of development to you retain, you will not be able to claim GST back. As there is no sale, there is also no GST payable.

So ultimately it depends on intention. However your initial intention may also change by the end of the development/construction, and that?s fine, so adjustments for GST can be made at this point

ok but he doesn't say there that you need a GST Margin Scheme annexure when you purchase
 
Hes a pretty big commercial developer. This is what he said.

If the intention is to sell the developments, then you will be entitled to claim GST on construction costs, but on the sale of the properties, GST will also be payable.

If you intend to keep development ( or part of) then the construction costs and any associated costs of development to you retain, you will not be able to claim GST back. As there is no sale, there is also no GST payable.

So ultimately it depends on intention. However your initial intention may also change by the end of the development/construction, and that?s fine, so adjustments for GST can be made at this point

I agree with all that, but as far as I know it is when you are selling that you need to make sure you use the Annexure, not when you are buying, unless the previous owner is claiming the Margin scheme and then they are the ones to make sure they have it included in the sale.
 
If the intention is to sell the developments, then you will be entitled to claim GST on construction costs, but on the sale of the properties, GST will also be payable.

If you intend to keep development ( or part of) then the construction costs and any associated costs of development to you retain, you will not be able to claim GST back. As there is no sale, there is also no GST payable.


So ultimately it depends on intention. However your initial intention may also change by the end of the development/construction, and that?s fine, so adjustments for GST can be made at this point

i have been reading and following threads that talk about CGT, GST, Margin scheme for a bit and am still confused myself.


some possible reads related

http://somersoft.com/forums/showthread.php?t=109056

http://somersoft.com/forums/showthread.php?t=108779
 
This was his response to my question about GST Annexure

"I recommend that on all offers, that is either purchase or sale, that if margin scheme is being used, that the annexure is completed at offer time. Offer needs to be accepted on understanding that margin scheme is being applied.

However as the purchaser, it is up to the vendor to determine if the margin scheme is to apply, and not you as the purchaser"
 
This was his response to my question about GST Annexure

"I recommend that on all offers, that is either purchase or sale, that if margin scheme is being used, that the annexure is completed at offer time. Offer needs to be accepted on understanding that margin scheme is being applied.

However as the purchaser, it is up to the vendor to determine if the margin scheme is to apply, and not you as the purchaser"

Cool, that is my understanding then. It is not you as the purchaser who needs to worry about the GST Annexure when buying a site that may be subject to your own margin scheme if/when you eventually sell.

If they are selling subject to the margin scheme to you, then they need to fill it ou
 
When buying a property you should check who the seller is. If the seller has an ABN then GST may apply to the acquisition if its
a) New residential property (unlikely the buyer would ever use the MS here)
b) Commercial property
c) Vacant land - Or substantially vacant. (ie a house ready to demo)

1. If the seller chooses the margin scheme the buyer can NEVER claim any GST. Its prohibited.
2. If the buyer wants to claim GST they should get legal or tax advice. They may end up with a land cost that exceeds budget and a cashflow issue.
3. The buyer can use the margin scheme when they sell and the fact that the acquisition did or didn't use the MS has no standing. The exception can be buying form an associate or a associate deceased estate.

The margin scheme has two catches to look for:

1. Nobody can claim any GST when buying (since its not 1/11th !! In fact the only person who will know how much GST would be the vendor and ATO). You also wont get a tax invoice and wont need one.
2. The VENDOR chooses if the MS applies by the basis of the contract
3. You cant agree to use the MS after contracting.

No developer would choose to buy land using the MS if they had a option. They want to increase profit and claim any GST.

Tip : Seek tax advice from tax advisers who know property taxes if you deal in property. Using a general income tax adviser may be like seeking a chiropractor to fix a tooth ache. If the tax adviser cant immediately explain the margin scheme in plain English they don't know it well enough to use them.
 
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