A developer in SA sells a new residential apartment. How does the GST margin scheme work in this context?
Correct Answer
B) GST is worked out on the margin between the sale price and the developer's acquisition cost
Under Division 75 of the GST Act, a developer selling new residential premises can, with the buyer's written agreement, calculate GST on the margin (broadly, the sale price less the acquisition price or an approved valuation) instead of the full price. It cannot be used where the developer acquired the property through a fully taxable supply, and a buyer under the margin scheme cannot claim an input tax credit.
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