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Goods and Services Tax

Goods and Services Tax, commonly referred to as GST, is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia.

Generally, businesses and other organisations registered for GST will:

  • include GST in the price of sales to their customers.
  • claim credits for theGST included in the price of their business purchases.

This tax began in 2000 to replace several state and federal taxes, duties and levies that existed up until this point.

How you apply GST to property, depends on whether it is either:

  • commercial premises
  • residential premises
  • commercial residential

In general GST does not apply to the sale or purchase of established proeprties, but is included by the developer in the purchase price of new or off the plan properties

When you sell a property, the sale may be:

  • taxable – this means you are liable for GST on the sale, and you can claim GST credits for anything you purchase or import to make the sale (subject to the normal rules on GST credits)
  • GST-free – this means you are not liable for GST on the sale, but you can claim GST credits for anything you purchase or import to make the sale (subject to the normal rules on GST credits)
  • Input taxed – this means you are not liable for GST on the sale and you cannot claim GST credits for anything you purchase or import to make the sale mixed – this is a combination of any of the above.

Your property transactions may need to be included in your GST registration turnover calculation.

As you can see Capital Gains Tax is a complicated area and it’s best to seek advice from your accountant on these matters. The A.T.O  also have a lot of information on CGT

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About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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