Fixed percentage method

The fixed percentage method

This method only requires you to know the:

  • contract price,
  • class of building, and
  • percentage of construction that has occurred at the contract date.

For a full explanation of the fixed percentage method, please refer to Revenue Ruling DA-048v2.

Different classes of building

The different classes of building are:

  • Single lot freestanding or single dwellings sharing side walls, for example a terraced house or duplex. This also includes dwellings which have abutting garage walls. If there is common property, it cannot be single lot freestanding.
  • Multi-lot low rise – up to and including 3 storeys, not including basements. These are usually units or apartments with access to common property.
  • Multi-lot high riseare buildings of 4 or more storeys, not including basements. These are usually units or apartments with access to common property.

Amount of construction completed at the date of contract

Determining the amount of construction costs completed as at the date of the contract of sale, is done depending on how the project is managed. This can be either a whole of project approach or a single lot approach.

Whole of project approach

In multi-lot developments, the completion of construction works for the property or the lot, and the issue of the occupancy permit, depends on the completion of construction works for all lots in the development, including the common areas.

Single lot approach

A transferor can use the single lot approach when:

  • The completion of the construction works for the property is not dependent on the completion of construction works for all properties in that development.
  • Separate approvals, including the occupancy permit, can be obtained for the individual lot.

For more information on determining the percentage of construction costs completed as at the contract date, please refer to Revenue Ruling DA-048v2.