Have you heard about the investor who LOST over $15,000 in GST refunds for their investment property? 😧
They didn't ask their accountant for advice BEFORE buying the property and made a COSTLY mistake.
The THREE words that caused all the trouble?
👉 GST Margin Scheme - a simplified way of calculating GST on the profit margin of a sale.
Under normal circumstances, a GST-registered investor will receive a refund from the ATO for the GST incurred for the purchase.
But when the margin scheme is applied, the GST paid under it is NOT refundable because the seller didn’t claim GST credits when they purchased the property.
For the GST Margin Scheme to be used, the buyer MUST agree to let the seller apply it, and the seller MUST confirm in writing before the settlement date. 📅
Usually, this is specified in the contract.
So the lesson here is to READ the contract and speak to your accountant BEFORE signing on the dotted line. ✍️
#daviemach #GST #investor #investmentproperty
