Hi, I am not a gst registered who tried to do an investment by demolishing our rental property building two one to live one to rent however disastrous building costs made me to sell the one we wanted to rent. If no gst mentioned on COS nor any withheld, and ato ruled that I had to pay gst can I then go back and get gst margin applied given purchaser is OK with that? How then this would work? Should I get myself registered and claim all construction GSTs?
Hi @Stevemazda
If you're eligible to use the GST margin scheme it needs to be agreed upon before settlement so you should determine eligibility before offering the property for sale.
We have a GST property decision tool on our website that you can use to work out the GST implications for your sale. Let us know how you go and if you have further questions.
Hi @Stevemazda,
Great questions we will look into some others we have answered and let you know.
Hi @Stevemazda
If you're eligible to use the GST margin scheme it needs to be agreed upon before settlement so you should determine eligibility before offering the property for sale.
We have a GST property decision tool on our website that you can use to work out the GST implications for your sale. Let us know how you go and if you have further questions.
Thanks for the reply. I did use the decision making tool, however I am stuck at first step (investor v business). We never wanted to sell anything when we started this only one developing (rather to live in one rent the other) that's why we never thought to register for gst nor claimed anything during construction. Selling was only as we had to, given massive unexpected costs so debts etc. On paper I'm eligible for margin (if get registered) however in COS we didn't put gst withholding given we weren't registered when sold property. I applied for private ruling to see if ATO consider it as investment (so no gst applicable) despite selling a new residential... Unlikely we get ATO response by settlement so my question is if we don't withhold and ato says after settlement that we should, then can I apply margin scheme then (like extending margin scheme time after the settlement). I don't want to risk losing margin scheme after ATO ruling which is likely after settlement.
Settlement is in three weeks and I'm not sure what I need to do!
That's a tricky one and one that a private ruling will confirm. You may want to consider seeking advice from a registered tax professional if you don't think the private ruling will be available before settlement.
We have information about when the margin scheme can't be used and although it doesn't specifically state you can't use the margin scheme after settlement, it does state you need to be registered for GST at the time of sale. We also know that you need a written agreement with the other party about applying the margin scheme before settlement.
If GST applies the purchaser will hold back an amount from their payment to you and then send it to us.
Take a read through determining of you're running an enterprise as well.
15 Apr 2026 · 4 min read time
15 Apr 2026 · 8 min read time
917 views
4 replies