Worked Estimates and Checklists
GST on renovations in Australia: reading ex-GST and GST-inclusive quotes
How 10% GST applies to renovation quotes in Australia, how to convert ex-GST prices, when a builder does not charge GST, and why homeowners usually cannot claim it back.
GST in Australia is 10% and applies to building work supplied by a business registered for GST. For a homeowner renovating their own home, GST is a real cost: you generally cannot claim it back, so every estimate and every quote comparison should be in GST-inclusive dollars. To turn an ex-GST price into what you will pay, multiply by 1.1; to find the GST inside a GST-inclusive price, divide by 11. A business below the GST registration threshold does not charge GST at all, and its price is simply the full price.
This guide is part of worked estimates and checklists. It is general information, not tax advice.
The arithmetic
| You have | You want | Calculation | Example (illustrative) |
|---|---|---|---|
| Price excluding GST | GST amount | Price x 0.10 | $45,000 x 0.10 = $4,500 |
| Price excluding GST | Price including GST | Price x 1.10 | $45,000 x 1.10 = $49,500 |
| Price including GST | GST component | Price ÷ 11 | $49,500 ÷ 11 = $4,500 |
| Price including GST | Price excluding GST | Price ÷ 1.1 | $49,500 ÷ 1.1 = $45,000 |
A common mistake is to take 10% off a GST-inclusive price to find the ex-GST figure. $49,500 less 10% is $44,550, not $45,000. Divide by 1.1 instead.
The GST calculator adds GST to an ex-GST quote for you.
Who charges GST
- A business must register for GST once its GST turnover reaches the registration threshold (currently $75,000 a year for most businesses; check the ATO for the current figure).
- A registered builder or trade must include GST in the price of taxable supplies, and its tax invoices show the GST.
- A smaller sole trader below the threshold may not be registered. Their invoice should not include GST.
You can check whether an ABN is registered for GST, and from when, on the Australian Business Register. If someone charges you "GST" but is not registered, ask why and do not pay the GST component until it is resolved.
Quotes, contracts and GST
Trade-to-trade quotes are often written ex GST because builders can claim the GST back. When the same trade quotes a homeowner, ask for a GST-inclusive price. Several state contract laws require the contract price for domestic building work to be stated including GST, and NSW thresholds, for example, are expressed including GST ($5,000 for a written contract, $20,000 for a large job contract and home building compensation cover).
Worked comparison (illustrative)
| Quote | As written | GST-inclusive | Difference |
|---|---|---|---|
| Kitchen company | $45,000 + GST | $49,500 | — |
| Local builder | $48,000 incl. GST | $48,000 | $1,500 cheaper than the kitchen company |
| Sole trader cabinetmaker, not GST-registered | $46,000 | $46,000 | $3,500 cheaper than the kitchen company |
On headline numbers the kitchen company looked cheapest. In GST-inclusive dollars it is the dearest of the three. Remember to compare scope as well; see comparing builder quotes.
GST and the parts of your budget
| Budget line | GST usually included? |
|---|---|
| Builder's contract price | Yes, if the builder is registered |
| Prime cost and provisional sum allowances | Check: the contract should say whether allowances include GST |
| Variations | Should be priced including GST |
| Council development application fees | Many government fees are GST-free; check the council's fee schedule |
| Private certifier or building surveyor fees | Usually include GST |
| Home warranty insurance premium passed on by the builder | Check the contract and certificate |
| Appliances you buy yourself | Yes, at the retail price |
When GST may be different
- Investment properties. Renovating a residential rental property does not usually let you claim GST, because residential rent is input taxed. Different rules apply to commercial property and to property developers.
- Business use of home. Generally does not change the GST position for a homeowner.
- Building to sell. If you renovate or build with the intention of selling, GST and income tax may apply differently. Get tax advice.
- Owner-builders. Owner-builders pay GST on materials and on registered trades they engage, and generally cannot claim it back for their own home.
These are general points. For your own situation, check the Australian Taxation Office or a registered tax agent.
Mistakes to avoid
- Comparing an ex-GST quote with a GST-inclusive one.
- Taking 10% off a GST-inclusive price instead of dividing by 1.1.
- Adding GST to a quote from a business that is not registered.
- Forgetting GST on variations, which can push the contract over a threshold.
FAQ
Can I claim GST on my home renovation?
Generally no, if it is your own home and you are not carrying on a business of property development. Check with the ATO or a tax agent if your situation is different.
Should my contract show GST separately?
It is helpful. The total price should be stated including GST, and the builder's tax invoices will show the GST amount.
Does GST apply to labour as well as materials?
Yes, GST applies to the whole taxable supply by a registered business, labour and materials alike.
Is a cash discount "without GST" legal?
A GST-registered business must account for GST on its taxable supplies whether paid in cash or not. A "no GST for cash" offer is a warning sign, and paying cash without a contract also weakens your protection.
Sources
- Australian Taxation Office — GST registration, tax invoices and property
- Australian Business Register — check an ABN and GST registration
- business.gov.au — GST basics for businesses
- Building Commission NSW, via NSW Government — NSW thresholds stated including GST
- Queensland Building and Construction Commission — Queensland thresholds including GST
