ATO ruling on GST positive for operators planning to sell says KPMG, with retrospective opportunity. $2 million+ claimed
At a recent Villages. com. au seminar, KPMGs Lachlan Wolfers outlined that the ATO now accepts that if a village operator builds a village with the intention to sell it as soon as they fill the village with residents occupying under loan /...
At a recent Villages.com.au seminar, KPMGs Lachlan Wolfers outlined that the ATO now accepts that if a village operator builds a village with the intention to sell it as soon as they fill the village with residents occupying under loan / leases, then in practise they can typically claim around 95%+ of the GST credits for their development costs. He reported that one developer was able to claim back $2 million plus interest as a result of the ATO's change of view. This is also particularly helpful from a cash flow perspective. However, if the developer intends to lease to residents for more than 5 years before it is sold, then the GST credits cannot usually be claimed. The 5 year period starts from when the residents first occupy the village, and effectively applies on a unit by unit basis.
