In media release No 2010/023, issued 10 December 2010, the Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, announced the release of a consultation paper on reforms to the GST margin scheme. The Government announced the changes in the 2010-11 Budget following a review by the Treasury of the GST margin scheme.
The GST margin scheme allows taxpayers an alternative means of calculating GST on property. When calculating GST in the normal way, GST is one eleventh of the GST inclusive selling price. Under the margin scheme, the GST is calculated as one eleventh of the difference between the selling price and the acquisition cost of the property (the margin), however, the supplier has no entitlement to input tax credits for its acquisition of the property.
Consultation closes on Friday, 21 January 2011. The changes will apply from 1 July 2012.