Forums / Getting Technical / Legal & Accounting / New Property GST/Tax Questions/Help Needed

1-Day Millionaire Mastermind Workshop - Only LIVE Training in 2019!
Viewing 5 posts - 1 through 5 (of 5 total)
  • PerthPropertyHunter
    Participant
    @perthinvestor
    Join Date: 2014
    Post Count: 16

    Hi All,

    I have a couple of things I need your valued thoughts on please…

    1. I need to work out the GST liability of the sale of a new residential property – my understanding is that I calculate 1/11th of the sale price minus (the construction and development cost times 1/11th plus 1/11th of the land purchase price). Is this correct or other factors involved?

    2. During the construction period can I claim things like interest costs (and any other costs) against my income?

    Thanks in advance everyone.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    1. GST would generally be calcuated on the sale price of the property while it is new.
    There may GST inputs you can claim.

    2. Depends on the circumstances. If your intention is to build and sell then the interest would be a capital expense.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    And don’t forget the margin scheme may apply.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    PerthPropertyHunter
    Participant
    @perthinvestor
    Join Date: 2014
    Post Count: 16

    Thank you Terry, much appreciated. Yes the intention was always to sell this dwelling so great to hear the interest could be claimed. Unfortunately, the clarity level of the ATO website is very low.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    I think you probably couldn’t claim the interest until the property is sold.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

Viewing 5 posts - 1 through 5 (of 5 total)

You must be logged in to reply to this topic.