Question:
My client has purchased several blocks of land. Some with GST, some without.
They are registered for GST.
Their business is property development; they contract to the builder to build the house and sell it to people.
Hence a house and land package. I.e., they purchased one block for $143,000 incl. GST. The block is a standard size house block for the area.
They are just about to sign a contract to build the house and sell the land for $630,000. The house is a 4-bedroom standard house.
Should the sale have GST on it? I believe it should, as there is no reason it shouldn’t.
I also came across this piece from the ATO.
Answer
GST is definitely payable on the sale. Since 1.7.2018, it has been the responsibility of the solicitor acting for the purchaser to forward 7% of the selling price to the ATO.
When doing the BAS, the developer later adjusts this figure upwards or downwards when doing the precise calculations.