Private ruling: Eligibility to use the margin scheme
Date of advice: 9 December 2020
Published: February 2021
Ruling period: 1 July 20XX - 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you eligible to apply the margin scheme in accordance with Division 75 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes. You will be able to apply the margin scheme to your supply of new residential premises described in this private ruling.

Relevant facts and circumstances: xx (You) are registered for GST effective from xx February xxxx. On x March xxxx you (as purchaser) and Vendor entered into a contract of sale to purchase the property located at xx (Property) with settlement occurring on x August xxxx. The Property was purchased for $ xx and consisted of existing residential premises. The Vendor was not registered or required to be registered and GST did not apply to the sale which settled on x August xxxx. You did not claim input tax credits on the purchase of the Property. You subsequently demolished the Property and constructed three new residential premises. These became known as: • x; and • y; and • z. You anticipate that auction for sale of the three new residential property will take place between xxxx to xxxx You and the purchaser/s of the new properties will agree in writing that the margin scheme will be applied to the sale. You will ensure that this written agreement will be made on or before the day of supply.