GST on Developments??

[Lenno]

Greetings All and let me first apologise if this question has been asked and answered before but am new to this forum and am not sure of procedures!!
Long winded to get to my question which is !(drum roll!!!)
How do I calculate GST on sale of 2 houses which we built and claimed GST as we were paying for the build and wc items etc??
Imagine !!??: easy because this is how it is!! Bought land for 2* 120k and sale of house is 335k and 343k .
Do I calculate using the nett sale price minus the gross cost of the land ,ie: say 335k less sale commision etc minus the gross cost of the land or is this not correct.
As much as I hate looking up things on the internet , perhaps a plain english site where I could find out would also help.
If I ask the accountant to do it for me , then I will never know how to work it out.
Thanking you Regards Lenno

 

[letiha]

How much was the cost of building? How much GST did you pay on the land and build etc.

Basically your GSt payable will be $30,454 and $31181 - the amount of GST that you have already paid as these will be credits. You will still have to pay the applicable amount of tax on the profit as well.

So for example land was $120k GST component would have been $10909 if the build was $170k (as an example) the GST would have been $15454 so thats $26,363.

So using these examples you would be liable to pay $4091 an 4818 (using the guesstimate of building costs)

 

[secret squirrel]

not so simple am afraid as letitha. gst different for developers. first ask can you use margin scheme or not. depends on lots of facts. if so might be good. depends residential or commercial whether other party want it and how you buy it. maybe buy gst free then margin scheme or farmland and use concession then margin scheme. but people must agree also later for margin scheme. then ask if change of purpose. say you keep and rent they have gst adjustments. complex. let accountant decide.

 

[Mry]

Developments are hard stuff. Secret Squirrel has nailed it on the head, too many questions before we even begin to start answering questions. Was it a rental, what was the intention on purchase, has this sort of thing been done before, structuring, was the land GST free, who are you selling to, are you registered for GST, etc.

 

[Lenno]

See if we can answer some questions to clarify,
No GST paid on purchase of land , Yes-to registered for GST via JV,
Claimed GST paid , and been refunded same, on all purchases and labour costs involved . Main concern---I think is : GST paid on sale ???---.
say, 335k less 10k commission and say 2k conveyancing , therefore payable difference between on nett sale price and gross buying price of land which was 120k + conveyancing etc.
Houses were never meant to be rented and were not , and yes claimed GST under margin scheme.
Thank guys and gals,
Regards Lenno

 

[Lenno]

Greetings again , people , and I am still asking about GST on Develepments????

We have claimed the GST as we were building and now comes the time to cough it back up again , however , do I deduct costs of selling and pay GST on the nett figure ---or on the total sale price of the house of 335k, less the cost of the land ---120k . Anybody please !!!
So--- cost of land 120K plus buying costs-- say 5k
sale of house less costs --say 2k giving me a nett to pay GST on or is GST on gross figures ???
Any thoughts , Thanking you
Lenno

 

[JoannaK]

you really really need to speak to your accountant about this one.

It is a very tricky area.

I would say that GST is remitted on the Gross sale price of the property you've sold. BUT, you say you didn't pay GST when you purchased so it is POSSIBLE that you can sell under the margin scheme, but given that you didn't pay any GST on the purchase it's probably much the muchness.

Speak to your accountant, don't "go it alone" on this.