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Property developers and GST under ATO spotlight

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The ATO has flagged an increasing focus in 2012–2013 on property developers who have a history of non-compliance with GST obligations. The ATO says some developers claim input tax credits (ITCs) throughout the life of a development, but then avoid paying GST when they sell.

The ATO has adopted a new approach of identifying and engaging with these developers prior to sale of a development and, as a result, it says it may contact tax agent clients at registration and throughout the property life cycle.

The ATO also continues to:

  • use third-party information to identify unreported property sales, particularly in the case of one-off property transactions;

  • seek to highlight discrepancies before audit action; and

  • identify incorrect application of the margin scheme provisions to reduce the GST payable on property sales.

Source: The TAXAGENT magazine, Issue 56, September 2012, www.ato.gov.au/taxprofessionals/content.aspx?menuid=0&doc=/content/00333018.htm&page=44&H44

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