GST by Industry: Special Rules for Property, Vehicles, Food, Farming and Rideshare

Introduction: Why Industry-Specific GST Rules Matter

If you think GST is just a flat 10% on everything, think again. The Australian GST system is riddled with special rules, concessions, and traps that vary dramatically depending on what you sell, buy, or produce. A property developer, a rideshare driver, and a farmer all face very different GST obligations—even though they all charge 10% on their supplies.

Getting these industry-specific rules wrong can lead to underpaid GST, lost input tax credits, and painful ATO audits. But when you understand the nuances, you can use them to your advantage—improving cash flow, claiming more credits, and staying compliant without the stress.

In this pillar article, we’ll walk you through the most important GST special rules for eight high-risk industries: property and construction, motor vehicles, food retail, farming, rideshare and the gig economy, not-for-profits, e-commerce, and medical services. You’ll learn exactly how to calculate GST, what records to keep, and how to use the GSTcalculatorAU tool to get it right every time.

1. Property and Real Estate: The Margin Scheme and Withholding Rules

Property transactions are among the most complex GST areas. Whether you’re a developer, investor, or renovator, the rules change based on the type of property, its age, and how it’s sold.

1.1 New Residential Premises vs. Existing Residential Premises

Sales of new residential premises (e.g., a newly built apartment or a house that hasn’t been sold as residential before) are generally taxable. The seller must charge GST on the sale price. Sales of existing residential premises (a home that has been lived in) are usually input-taxed—no GST is charged, and the seller cannot claim input tax credits on related expenses.

Example: A developer sells a brand-new townhouse for $880,000 (GST-inclusive). The GST payable is $80,000 ($880,000 ÷ 11). If the same townhouse is sold by a homeowner who lived in it, no GST applies.

1.2 The Margin Scheme

The margin scheme is a lifeline for property sales where the seller cannot claim full input tax credits (e.g., buying a property from an unregistered vendor). Instead of paying GST on the full sale price, you pay GST on the margin—the difference between the sale price and the purchase price (or an approved valuation).

Calculation: Margin = Sale price − Purchase price (or valuation). GST = Margin ÷ 11.

Example: You buy a property for $500,000 from an unregistered vendor (no GST claimed). You later sell it for $770,000. Under the margin scheme, GST = ($770,000 − $500,000) ÷ 11 = $24,545. Without the margin scheme, GST would be $70,000.

ATO Warning: You must agree in writing with the buyer to use the margin scheme before settlement. The buyer cannot claim input tax credits on the purchase if the margin scheme is applied.

1.3 GST Withholding at Settlement

Since 1 July 2018, buyers of new residential premises or potential residential land must withhold the GST component from the purchase price and pay it directly to the ATO at settlement. This prevents phoenixing—where developers dissolve their company to avoid paying GST.

How it works: The buyer withholds 1/11th of the contract price (or 7% if the margin scheme applies) and remits it to the ATO. The seller then lodges their BAS and claims the withheld amount as a credit.

Example: Contract price $660,000 (GST-inclusive). Buyer withholds $60,000 and pays $600,000 to the seller. The seller reports the sale in their BAS and offsets the $60,000 already paid.

1.4 Going Concern Exemption

Selling a business as a going concern (e.g., a rental property with tenants in place) can be GST-free if the sale includes everything necessary to continue operating and both parties are GST-registered. This avoids a large GST bill at settlement.

2. Motor Vehicles and Luxury Car Tax

Buying, selling, or leasing a vehicle for your business? The GST treatment depends on the vehicle type, its value, and how it’s used.

2.1 Claiming GST on Vehicle Purchases

If you buy a car for business use, you can claim the GST included in the purchase price as an input tax credit—provided you have a valid tax invoice and the car is used for a creditable purpose. However, if the car is also used privately, you must apportion the claim.

Example: You buy a ute for $55,000 (GST-inclusive) and use it 80% for business. GST on purchase = $5,000. You can claim $4,000 (80% of $5,000) as an input tax credit.

2.2 Luxury Car Tax (LCT)

Luxury Car Tax is an additional tax on cars above a certain threshold. For 2024-25, the LCT threshold is $89,332 for fuel-efficient vehicles and $76,950 for other vehicles. LCT is calculated on the GST-inclusive value above the threshold at a rate of 33%.

GST and LCT are separate. You still pay GST on the full price, but LCT is only on the excess. You cannot claim LCT as an input tax credit unless you are a primary producer or tourism operator eligible for a refund.

2.3 Trade-Ins and GST

When you trade in a vehicle, GST applies to the trade-in allowance as a separate taxable supply. The dealer will issue a tax invoice showing the trade-in value and GST. You can claim an input tax credit for the GST on the trade-in if you are registered.

3. Food and Beverage: Simplified Accounting Methods

Food retailers—cafés, restaurants, bakeries, and takeaway shops—face a unique challenge: some items are GST-free (basic food) and some are taxable (prepared food, dine-in meals). To reduce compliance costs, the ATO offers simplified accounting methods (SAMs).

3.1 What Are SAMs?

SAMs allow eligible food retailers to calculate GST using a flat percentage of total sales, rather than tracking every item. There are several SAMs, including the Business Norms method, the Stock Purchases method, and the Snapshots method.

Example (Business Norms): A café with 70% taxable sales and 30% GST-free sales might use an ATO-approved percentage of 65% taxable. If total sales are $110,000 (GST-inclusive), GST payable = $110,000 × 65% ÷ 11 = $6,500.

3.2 Eligibility and Record-Keeping

To use a SAM, you must apply to the ATO and meet certain conditions. You still need to keep records of total sales and purchases, but you don’t need to identify GST on every individual sale. This is a huge time-saver for small food businesses.

4. Farming and Primary Production

Farmers, graziers, and fishermen operate under a mix of GST-free and taxable supplies, with special concessions for land, livestock, and equipment.

4.1 GST-Free Farm Supplies

Many farm products are GST-free, including:

• Fresh fruit, vegetables, meat, eggs, and milk (unprocessed)
• Live animals for human consumption
• Wool, hides, and crops sold in their natural state

However, processed products (e.g., wine, cheese, cooked meats) are taxable. Farmers must carefully separate sales.

4.2 Farm Land and Going Concerns

Selling farmland can be GST-free as a going concern if the land is actively farmed and the sale includes all necessary assets (e.g., water rights, equipment). Alternatively, the margin scheme may apply if the land was purchased before GST or from an unregistered vendor.

4.3 Fuel Tax Credits for Primary Producers

Farmers can claim fuel tax credits for fuel used in machinery, vehicles, and equipment for farming activities. The credit rate changes with the fuel excise indexation. This is not a GST input tax credit but a separate claim on your BAS.

5. Rideshare and the Gig Economy

Rideshare drivers (Uber, Didi, Ola) and other gig workers face strict GST rules, regardless of their turnover.

5.1 Mandatory GST Registration for Rideshare

Even if you earn less than $75,000, you must register for GST the moment you start driving for a rideshare platform. This is because rideshare is classified as taxi travel, which has no threshold. You must charge GST on every fare and lodge BAS.

Example: You earn $20,000 in your first year driving for Uber. You must register for GST, issue tax invoices (or rely on the platform’s statements), and remit 1/11th of your fares to the ATO.

5.2 Claiming Expenses

As a GST-registered rideshare driver, you can claim input tax credits on business expenses: fuel, car maintenance, phone, tolls, and even the GST on the purchase of your vehicle (subject to private use apportionment). Keep a logbook to substantiate business use.

5.3 Other Gig Economy Services

For other gig work (Airtasker, freelancing), the normal $75,000 registration threshold applies. But if you provide ride-sourcing, the taxi rule overrides everything.

6. Construction and Subcontractors

The building and construction industry has specific GST reporting obligations, especially around subcontractors and progress payments.

6.1 Progress Payments and GST

Builders often receive progress payments. GST is attributable in the BAS period when the invoice is issued or payment is received, whichever is earlier. You must account for GST on each progress claim, not just at project completion.

6.2 Subcontractors and the GST Withholding Regime

If you hire subcontractors, you generally pay them GST-inclusive amounts and claim the input tax credit. However, in some cases, the ATO requires GST withholding on payments to subcontractors who don’t quote an ABN. Without an ABN, you must withhold 47% of the payment (including the GST component) and remit it to the ATO.

6.3 Residential vs. Commercial Construction

New residential construction is taxable; major renovations to existing residential premises may also be taxable if they create new premises. Commercial construction is always taxable. Understanding the difference is critical for quoting and invoicing.

7. Not-for-Profits and Charities

Not-for-profit organisations enjoy several GST concessions, but they must still navigate registration and reporting.

7.1 GST Registration Threshold

NFPs have a higher registration threshold of $150,000 (instead of $75,000). If turnover is below this, registration is optional. Many choose to register to claim input tax credits on expenses.

7.2 GST-Free Supplies for Charities

Charities can treat certain supplies as GST-free, including:

• Donations (no GST)
• Fundraising events (under specific conditions)
• Religious services
• Certain welfare and community services

However, commercial activities (e.g., op shops selling donated goods) are generally taxable, though special rules may apply.

8. E-commerce and Online Marketplaces

Selling on Amazon, eBay, or your own website? The GST rules for e-commerce have tightened, especially for imports and digital products.

8.1 GST on Low-Value Imported Goods

Since 1 July 2018, GST applies to goods valued at AUD $1,000 or less sold to Australian consumers. The obligation to collect and remit GST falls on the overseas supplier or the electronic distribution platform (EDP) if they facilitate the sale. If you’re an Australian business importing low-value goods, you may need to self-assess GST on importation.

8.2 Dropshipping and GST

If you dropship from an overseas supplier to an Australian customer, you are the supplier for GST purposes. You must charge GST on the full sale price and remit it to the ATO, even if the goods never touch your hands.

8.3 Digital Products and Services

Sales of digital products (e-books, software, streaming) to Australian consumers by overseas sellers are subject to GST. The ATO requires non-resident businesses to register and charge GST if their Australian turnover exceeds $75,000.

How to Use the GST Calculator for Industry-Specific Scenarios

Our free GST calculator at gstcalculatorau.com handles all the standard calculations, but you can adapt it for special rules with these steps:

1. Identify the GST-exclusive or inclusive amount. For a property sale under the margin scheme, first calculate the margin (sale price minus purchase price). Enter that margin as the amount.
2. Choose the right mode. Use “Add GST” if you have a GST-exclusive price and need to know the total. Use “Subtract GST” if you have a GST-inclusive price and need to extract the GST component.
3. For apportionment (e.g., business use of a car), calculate the full GST first, then multiply by your business-use percentage. Example: Full GST on a $33,000 car is $3,000. At 80% business use, claim $2,400.
4. For SAMs in food retail, apply the ATO-approved percentage to your total GST-inclusive sales, then use the calculator to extract GST. If total sales are $220,000 and your taxable percentage is 60%, enter $132,000 as the GST-inclusive amount to find the GST payable.
5. For rideshare drivers, sum all fares (GST-inclusive) and enter the total into the calculator to see your GST liability. Then subtract input tax credits on expenses to find your net BAS payment.

Always keep your working papers and reconcile with your accounting software. The calculator is a quick check, not a substitute for proper records.

Common Mistakes & Pitfalls

• Forgetting to register for GST as a rideshare driver. The ATO matches data from platforms and will catch you. Penalties and backdated GST can be devastating.
• Applying the margin scheme without a written agreement. The buyer can later demand a full GST invoice, leaving you out of pocket.
• Claiming GST on residential rent. Residential rent is input-taxed; you cannot claim input tax credits on related expenses unless it’s commercial property.
• Not withholding GST on new residential premises. Buyers who fail to withhold can be personally liable for the GST amount.
• Mixing up GST-free and taxable food items. A café that charges GST on bread but not on a sandwich can trigger an audit. Use a SAM to simplify.
• Claiming 100% GST on a vehicle used privately. The ATO requires a logbook or reasonable apportionment. Overclaiming is a red flag.
• Ignoring GST on low-value imports. If you’re an Australian business importing goods for resale, you may need to self-assess GST on the import declaration.

Conclusion: Master Your Industry’s GST Rules

GST is not one-size-fits-all. From the margin scheme in property to mandatory registration for rideshare drivers, each industry has its own playbook. The key to staying compliant and maximising your cash flow is understanding the special rules that apply to you, keeping meticulous records, and using tools like the GSTcalculatorAU to double-check your numbers.

Don’t let GST confusion cost you money. Bookmark this guide, share it with your bookkeeper, and use our free calculator for every transaction. When in doubt, consult a registered tax agent or BAS agent—the cost of advice is far less than an ATO penalty.

Ready to calculate your GST? Head over to gstcalculatorau.com and get your numbers right in seconds.