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asapfinance(Newbie)Newbie
19 Feb 2024

Hello ATO Community,


My business is about buying and selling second hand car. For example, I bought a second hand car at a price of $70,000 from a car dealer this week, and I'll sell it for $70,500 next week.


How to calculate GST of these 2 transactions?


1) Buy a $70,000 second hand car: $70,000 is more than car limit $68,108. How to calculate the GST on purchase? $70,000/11 OR $68,108/11?


2) Sell it at $70,500: How to calculate the GST on sell? $70,500/11?

1,507 views
1 replies
1,507 views
1 replies

Most helpful response

Most helpful reply

TonyATO(Community Support)Community Support
22 Feb 2024

Hello there @asapfinance


Most people can claim up to the car limit (1/11 × $68,108), but the good news for you is that dealers who buy cars for trading can claim 100% of the GST.


This means:

  1. You can claim 1/11 x $70,000 (assuming GST was included)
  2. If selling for $70,500 including GST, you charge 1/11 x $70,500


If you buy a used car from someone not registered for GST, you can still claim GST at the lesser of:

  • one-eleventh the amount you paid for the car
  • the amount of GST payable when the car is sold

All replies

Most helpful reply

TonyATO(Community Support)Community Support
22 Feb 2024

Hello there @asapfinance


Most people can claim up to the car limit (1/11 × $68,108), but the good news for you is that dealers who buy cars for trading can claim 100% of the GST.


This means:

  1. You can claim 1/11 x $70,000 (assuming GST was included)
  2. If selling for $70,500 including GST, you charge 1/11 x $70,500


If you buy a used car from someone not registered for GST, you can still claim GST at the lesser of:

  • one-eleventh the amount you paid for the car
  • the amount of GST payable when the car is sold

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GST on second hand motor vehicle purchase & sell | ATO Community