Ms. Zhang bought 2 adjacent houses in 2005 for a total of $2,000,000 and after knocking down and rebuilding, Ms. Zhang developed 3 Town Houses on the same site and sold them for $1,100,000 each. As the purchase contract did not state whether the Margin Scheme could be used, we needed to help Ms. Zhang prove her eligibility to use the Margin Scheme. We were able to prove that as the house she bought was a residential property, the GST was not refunded at the time of purchase and now the Margin Scheme can be used to refund the GST from the purchase price.

If you use the Margin Scheme, you will need to pay GST ($1,100,000*3-$2,000,000)/11=$118,181. Save $300,000-$118,181=$181,819