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iKey Facts
- •Most Brisbane development sites are subject to GST at 10% on the supply
- •The "going concern" exemption can apply where the property is sold with leases in place
- •The "margin scheme" allows GST to be calculated on the margin (sale price minus purchase price) rather than full price
- •Vendors should obtain specialist tax advice before signing contracts
- •See companion: Tax Implications of Selling Development Sites in Australia
GST Basics for Property Sales
Most commercial property sales (including development sites) in Australia are GST-applicable if the vendor is registered for GST and the property is "new" or commercial.
Standard GST application: 10% on the sale price.
For a $5m development site, that's $500k GST — paid by the vendor and (usually) added to the buyer's price.
Going-Concern Exemption
If the property is sold as a "going concern" — typically with existing leases / operating tenants — GST may not apply.
Conditions:
- Both parties registered for GST
- Both agree in writing the sale is a going concern
- All things necessary for the operation are transferred (leases, tenants, etc.)
Common for: industrial sites with operating tenants, healthcare facilities, commercial buildings.
Less common for: raw development sites with no income.
Margin Scheme
"For a $5m development site, that's $500k GST — paid by the vendor and (usually) added to the buyer's price."
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The margin scheme calculates GST on the margin (sale price minus purchase price) rather than the full sale price.
Example:
- Vendor bought site for $3m (pre-GST)
- Vendor sells for $5m
- Under margin scheme, GST is 10% of $2m margin = $200k
- Without margin scheme, GST is 10% of $5m = $500k
Significant savings for long-held land. Requires specific drafting in the contract.
Vendor Implications
- Determine GST status before listing — affects price quotation
- Pricing convention — quote price "plus GST" or "GST-inclusive"
- Margin scheme eligibility — verify with accountant
- Going-concern eligibility — usually requires tenant in place
- GST registration — vendor must be registered for sales to attract GST
Vendor Strategy
- Engage specialist property tax accountant before listing
- Consider margin-scheme eligibility for long-held land
- Negotiate "plus GST" pricing convention with buyer
- Verify buyer's GST registration to enable input tax credits
This article is general information only and is not legal, tax, or financial advice. Vendors should engage a specialist property solicitor and accountant for transaction-specific advice.
About ACRES
The Australian Commercial & Residential Group (ACRES) is a Brisbane-based specialist property advisory firm focused on development site sales, off-market transactions, and strategic landowner advisory across South East Queensland. Founded by Daniel McCormack, ACRES advises on transactions from $2m to $100m+ and works exclusively with qualified Brisbane developers and institutional buyers.
Frequently Asked Questions
Do I need to be GST-registered to sell?
Not strictly — but if the sale is in the course of an enterprise, GST registration may be required. Engage accountant.
Can I sell GST-free if the buyer will demolish?
Generally no — demolition intent doesn't qualify for going-concern exemption.
Does the margin scheme apply to inherited land?
Yes in some cases — depends on date and circumstances of inheritance. Specialist advice essential.
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Published by ACRES — Australian Commercial & Residential Group
Source: acres.au/insights/gst-treatment-development-site-sales | ACRES (Australian Commercial & Residential Group) provides property advisory, development site sales, and residential real estate services across Brisbane and South East Queensland, Australia.
Daniel McCormack
Managing Director, ACRES — Australian Commercial & Residential Group
