gst on house
- Thread starter fernfurn
- Start date
GST is payable on the first sale of a new house or a house that has undergone major renovations but this only applies if the seller is registered for GST. Further there is an exemption if the house has been rented for a continuous period of 5 years or more. If the seller purchased the property with the intention of reselling it at a profit then they would be required to be registered and charge GST but if they purchased the property with the intention of building or renovating to rent the house out then they would not be required to register for GST for that reason alone. Therefore even if they sell it in less than 5 years if they are not registered they will not need to charge GST.
"If the seller purchased the property with the intention of reselling it at a profit then they would be required to be registered and charge GST"
Julia, does this apply regardless of the businesses GST turnover or if the property is not substantially renovated?
Also i have applied for an ABN as i will be buying to renovate and sell (a 2month process) and continue again. I havent applied for GST - Would i need to in this case?
And is the "more than 75k turnover" that the ATO talks about -just the GST component or if the property that is subject to GST has a value of more than 75k?
Thanks in advance for your help
Matt
PS. your BANTACS website is a great source of info - well done!
Julia, does this apply regardless of the businesses GST turnover or if the property is not substantially renovated?
Also i have applied for an ABN as i will be buying to renovate and sell (a 2month process) and continue again. I havent applied for GST - Would i need to in this case?
And is the "more than 75k turnover" that the ATO talks about -just the GST component or if the property that is subject to GST has a value of more than 75k?
Thanks in advance for your help
Matt
PS. your BANTACS website is a great source of info - well done!
Bumping this thread because I'd love an answer to this question. I'm planning to do the same thing, i.e. buy reno and sell for profit, and I'd like to know how GST works in this scenario.
For example, let's say I do 3 renos in one year. Let's say each property was bought for $200k and sold for $250k and after costs netted $20k (not real numbers). Would my GST turnover be the total of the sales, i.e $750k? Or some other figure? If my total profit was $60k, i.e. less than $75k, would I need to worry about registering for GST? If I'm not doing new builds, or the renovations aren't substantial, would the sale still have a GST component? So confusing!
Any advice/links/resources will be gratefully received!
$750k. to argue they aren't substantial is a weak postion to push. just register and cop it on the chin
It depends if the sale of the property is a 'taxable supply' under the GST Act. No taxable supply = no GST. Usually the sale of existing residential properties is not a taxable supply, only new properties are. I think majorly renovated properties can be characterised as new properties though but it depends on the situation.
