Fact Sheet 10 - Sale of properties and GST - use of the margin scheme

The margin is normally calculated to be the difference between: • The sale price of the property and the amount you paid for the property; or • The sale price of the property and an appropriate property valuation. [...] Important Considerations It is important to note that the margin scheme only applies in working out the amount of GST on a taxable supply of real property that is made when selling a property, and only if the parties to the sale agree in writing to apply the margin scheme. [...] The consideration method (which uses the actual purchase price of the property) can be used regardless of when the LALC purchased the property to be sold. [...] GST payable without GST payable using the margin scheme using the margin scheme The LALC pays GST at The LALC only has to pay GST at 1/11th of $400,000, which is the sale price 1/11th of $550,000. [...] GST payable without GST payable using the margin scheme using the margin scheme The LALC pays GST at The LALC obtains a valuation as at the date it was required to be registered 1/11th of $550,000.