GST opportunities where adjacent properties are acquired to develop into a single lot

Developers can benefit under the GST margin scheme where adjacent properties are acquired and consolidated into a single development lot. This is often the case where the developed lots are sold under a community titles scheme.

There is a common misconception that, if a developer acquires part of a property as a taxable supply, it will affect its ability to use the GST margin scheme when the developer sells the developed stock.

Issues to consider

Where multiple properties are acquired, the GST treatment of the acquisitions may be different.

If the properties are consolidated, then the developer will need to determine:

• whether the margin scheme can be applied to sales to end purchasers;