When you build a new home in Australia, the construction costs include 10% GST on materials and labour. In certain circumstances, you can claim back a portion of that GST through the ATO's new residential premises provisions.
The key scenarios where GST rebate applies:
- You build a new home as an owner-builder and sell it within 5 years
- A developer builds and sells new apartments/houses (GST included in purchase price, buyer claims margin scheme benefit)
- Substantial renovation (where the renovation is so extensive the result is effectively a "new" building)
For buyers of new homes
When you buy a brand-new property from a developer, the purchase price includes GST. The developer prices it in. As the buyer, you may be eligible for a GST credit through the ATO if you buy through certain schemes or if the property qualifies for the first home buyer GST concession.
The most common consumer-facing rebate: the First Home Owner Grant (FHOG) which varies by state (—$10,000 in NSW, $10,000 in VIC, $30,000 in QLD for new builds) effectively offsets the GST burden on new construction.
The $750,000 cap (most states)
Most state FHOGs for new builds apply to properties valued under $750,000. Above this cap, no grant is available but the GST treatment remains the same (it is baked into the developer's price).
