GST on property: margin scheme, new homes and GST withholding
Selling a home you live in usually has no GST. But builders, developers and people who subdivide or build to sell can be caught by GST. Getting it wrong can be very expensive.
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When does GST apply to property?
🏗️ New residential property
Sales of new homes and units are generally subject to GST if the seller is registered or required to be registered.
🏡 Existing homes
Sales of existing (not new) residential homes are generally input taxed – no GST.
🏢 Commercial property
Usually subject to GST, unless sold as a going concern.
🌾 Farm land
Special rules may apply.
Do I need to register for GST?
If you are carrying on an enterprise – for example building or subdividing to sell – and your turnover is $75,000 or more, you must register. A one-off project can still be an enterprise. Get advice before you start.
The margin scheme
The margin scheme lets you pay GST on the margin (the difference between your sale price and your purchase price or valuation) instead of the full sale price. It can save a lot of GST, but:
- The buyer and seller must agree in writing, usually in the contract, before settlement
- It cannot be used if you bought the property as a fully taxable sale
- The buyer cannot claim GST credits on a margin scheme purchase
- A valuation may be needed for older property
GST withholding at settlement
For new residential property and some land, the buyer usually has to pay part of the price straight to the tax office at settlement – generally 1/11th of the price, or 7% if the margin scheme is used. Sellers must give buyers written notice before settlement.
⚠️ General information only – not tax or legal advice. GST on property is complex and errors are costly. Contract terms are legal matters – speak with your solicitor or conveyancer about the contract. This page is a simple overview as at November 2026 and does not consider your personal circumstances. Laws, rates and thresholds change, and outcomes are decided by the tax office or the courts – UV TAX cannot guarantee any result. Please get advice for your situation before acting.
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0466 268 405Frequently asked questions
Is there GST when I sell my home?
Usually not. Sales of existing homes are generally input taxed. New residential property can be different.
What is the margin scheme?
It lets an eligible seller pay GST on the margin instead of the full sale price. It must be agreed in writing before settlement.
What is GST withholding?
For new residential property, the buyer usually pays part of the price straight to the tax office at settlement – generally 1/11th, or 7% under the margin scheme.
Do I need to register for GST to build and sell one house?
Possibly. It depends on whether you are carrying on an enterprise. Get advice before you start.
Related
General information current as at November 2026.