Private ruling: GST and the margin scheme
Date of advice: 27 August 2025
Published: 27 October 2025
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX

Ruling: Question one | Are you eligible to use the margin scheme when selling the property? | Answer one | Yes, provided you and the buyer have agreed in writing that the margin scheme is to apply, on or before the making of the supply, or within such further period as the Commissioner allow. | Question two | If the answer to question one is yes, is the date for calculating the cost base to determine the margin formula DD MMM YYYY? | Answer two | Yes.

Relevant facts and circumstances: You are a self-managed superannuation fund. Your trustee is XXX. ZZZ is a member of the superfund and a director of the corporate trustee. You registered for GST from DD MMM YYYY. You own vacant land that you intend to sell. The property, which at the time held an old residence, was acquired from ZZZ on DD MMM YYY under a registered transfer of title for consideration described as "being entitled in equity". In an earlier transaction on DD MMM YYYY, the property had been acquired by ZZZ from XXX as trustee for a trust, under a registered transfer of title, for consideration described as "being entitled in equity". ZZZ was registered for GST at the time of the transactions. ZZZ did not report GST on either of the related transactions that occurred on DD MMM YYYY and you did not claim GST when you acquired the property. The residence was leased for a period of time to a business until that business was sold and the new owner moved to a different location. The old residence was then demolished with the intention of developing the for sale. However, your plans have changed and you intend to sell the vacant land. You have reported GST on the rental income and also claimed GST credits associated with the demolishment of the house and development plans thus far.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 section 75-5 | A New Tax System (Goods and Services Tax) Act 1999 section 75-11

Reasons for decision: Summary: Section 9-5 provides that you make a taxable supply if: (a) you make the supply for consideration; and (b) the supply is made in the course or furtherance of an enterprise that you carry on; and (c) the supply is connected to the indirect tax zone (Australia); and (d) you are registered or required to be registered for GST. However, the supply will not be a taxable supply to the extent the supply is GST-free or input taxed. In your case, the relevant facts indicate that paragraphs 9-5(a) to 9-5(d) will be satisfied. As the property is vacant land, the sale will not be GST-free or input taxed. Division 75 allows the use of the margin scheme to bring within the GST system any taxable supplies of freehold interest in land. Goods and Services Tax Ruling GSTR 2006/8 Goods and services tax: the margin scheme for supplies of real property acquired on or after 1 July 2000 (GSTR 2006/8) explains how the margin scheme applies to a supply of real property made after 1 July 2000. Section 75-5 provides that the margin scheme applies in working out the amount of GST on a taxable supply of real property that you make by selling a freehold interest in land, if you and the recipient of the supply have agreed in writing that the margin scheme is to apply. The agreement must be made on or before the making of the supply, or within such further period as the Commissioner allows. However, under subsection 75-5(2), the margin scheme does not apply if you acquired the property through a supply that was ineligible for the margin scheme. Subsection 75-5(3) outlines particular circumstances where a supply would be ineligible for the margin scheme. This includes situations where the property was acquired through a supply that did not apply the margin scheme. Additionally, if the acquisition was made from an associate, it is treated as a sale for GST purposes, regardless of consideration. In your case, we consider that the elements of subsection 75-5(3) do not apply to exclude eligibility for the margin scheme to be applicable. Therefore, you are eligible to apply the margin scheme on the sale of the property provided you and the byer have agreed in writing that the margin scheme is to apply, on or before the making of the supply, or within such further period as the Commissioner allow. Paragraph 75-11(7)(d) provides that if you acquired the property from an entity who was your associate at the time of the acquisition and provided that the other subsections in section 75-11 do not apply, the margin is the amount by which the consideration for the supply exceeds the GST inclusive market value of the real property at the time of its acquisition. Section 75-11 outlines how the margin for supplies of real property is calculated in particular circumstances. Based on the relevant facts, those circumstances do not apply in your case. Paragraph 38 of GSTR 2006/8 explains that the Commissioner considers that the acquisition of a property is made at settlement as this is when the purchase obtains: • an unconditional possession of a registrable instrument of transfer; or • an instrument of transfer that would be registrable once stamped. Paragraphs 106 - 109 of GSTR 2006/8 endorses paragraph 75-11(7)(d) and provides relevant examples regarding the supply of real property where that property was acquired from an associate. As you acquired the property on XX XX 20XX from and associate by way of a registered transfer of title, this is the date you acquired the property and the margin will be calculated based on the GST inclusive value of the real property.