Is There GST on Second-Hand Goods?

Whether you’re sourcing used equipment for your startup or running a business that resells used cars, you’ve probably wondered: “Is there GST on second-hand goods?” And if you’re registered for GST, there’s usually a follow-up question, too: “Can I claim credits on second-hand purchases?”

This blog offers a quick guide to GST on second-hand items and resale rules, helping you understand what’s claimable, when GST applies, and how to stay compliant with the ATO.

What Is GST and Why Does It Matter?

In Australia, most goods and services, known as taxable supplies, have a 10% Goods and Services Tax (GST) added to the price. Here’s how it works:

Businesses collect GST from their customers.
They claim credits for any GST they pay on their own purchases.
They regularly report the difference (GST collected minus GST paid) to the Australian Taxation Office (ATO) through their Business Activity Statement (BAS).

In short:
The customer pays GST when they buy something, and the business passes it along to the ATO—but the business doesn’t actually “lose” that money because they can usually claim back what they spent on GST for their own purchases.

What Are Second-Hand Goods?

The ATO defines second-hand goods as items that have been previously used and are no longer new. This can include assets like:

Pre-loved furniture
Used cars
Antique jewellery
Vintage designer clothing
Refurbished electronics

Buying and selling second-hand goods has always been popular, and with today’s focus on sustainability and reuse, it’s a growing part of the economy. But where does GST come in?

Is There GST on Second-Hand Goods in Australia?

Second-hand goods can be taxable under Australian GST law—but only under specific conditions. Whether GST applies depends not just on what you’re buying but also on who you’re buying it from and why you’re buying it.

GST applies to second-hand items in the following scenarios:

1. The seller is GST-registered and sells the item as part of their business activities.

Example: If you buy a second-hand laptop from a GST-registered business, GST is likely included in the price. However, if you buy the same laptop from a private individual selling on Facebook Marketplace, no GST applies, even if you’re buying it for business use.

2. The goods are not GST-free or input-taxed items by nature.

Example: A second-hand car dealership sells a pre-owned car that is not exempt from GST (e.g., it’s not a GST-free vehicle like certain vehicles for people with disabilities). The car dealer must include GST in the sale price when selling to a customer who is not exempt from GST.

GST on Sale of Second-Hand Goods

Are you selling second-hand items? As mentioned previously, if your business is registered for GST, then you’ll usually need to charge 10 %GST on any second-hand goods you sell and report the income in your BAS.

However, if you’re a non-GST registered sole trader or hobbyist, you don’t need to worry about GST on your sales, and buyers can’t claim GST credits from you.

What About Antiques and Collectibles?

Are you selling antiques (typically over 100 years old) or collectible items of value? They are usually considered second-hand goods, but the exact treatment depends on who is selling them and any applicable exemptions:

GST-Registered Businesses: Sales are typically subject to GST unless the margin scheme applies.
Margin Scheme: This allows you to pay GST only on the profit margin (the difference between purchase and selling price).
Low-Value Items: Certain low-value items may be exempt from GST.
Specialised Collectibles: Some collectibles, like artwork, may have unique GST treatment.
Precious Metals: These are generally exempt from GST, but antiques or collectibles containing precious metals may still be considered second-hand and fall under GST rules if sold as such.

GST Credits on Second-Hand Goods

Now, on the flip side: what if you’re the buyer and you’re running a GST-registered business? If you buy second-hand goods for resale, can you claim GST credits?

The answer is—yes, you often can!

Even if the seller wasn’t registered for GST and didn’t charge you GST on the purchase, you may still be entitled to claim GST credits—thanks to a special rule under Division 66 of the GST Act.

Division 66 allows GST-registered businesses to claim input tax credits on second-hand goods bought for resale, even when GST wasn’t originally included in the price. Of course, you need to meet the right conditions—and keep good records to back it up.

Eligibility for GST Credits on Second-Hand Goods

Here are the conditions you must meet to be eligible for claiming GST credits on second-hand goods:

The goods must be second-hand tangible property (excluding precious metals).
You must buy them for resale.
The seller must not be registered for GST, nor required to be.
The goods must be acquired in Australia.

How to Claim GST Credits on Second-Hand Goods?

Once all the conditions are met, you can claim a GST credit of 1/11th of the purchase price when the item is sold. When claiming credits, you need to choose the right method based on how you bought the goods.

There are two calculation methods:

1. Direct Approach

This is a simple process, best suited to straightforward resale scenarios where tracking individual items is easy. It’s generally used when:

You resell the second-hand goods as a complete unit.
You divide the goods into smaller parts and sell those individually—but only if the original price you paid was itemised accordingly.
You are claiming the credit on an item valued at $300 or less.

When to Claim the Credit (Attribution):

Acquisitions less than 300$: You can generally claim the credit in the tax period you paid for or acquired the goods (if you use the non-cash/accruals basis).
Acquisitions over $300: You must wait until the tax period in which you receive payment or issue an invoice for the subsequent sale of the item.

However, you can’t use this method if:

The original sale to you was a taxable or GST-free sale.
You plan to hire out the goods rather than resell them.
You imported the goods from overseas.
Your eventual sale will not be taxable (for example, an input-taxed sale).
The Global Accounting Method is mandatory (see below).

2. Global Accounting Method

If your second-hand purchase is more complicated—maybe you bought a bulk lot of goods valued at over $300 and resold parts separately—you’ll likely use the Global Accounting Method.

When is it mandatory?

You generally must use the GAM if you paid more than $300 for a lot of second-hand goods, and you then divide them into smaller parts for separate supplies (e.g., buying a car for parts).

When can you choose to use it?

You can choose to use the GAM for purchases costing $300 or less, even if you divide them, for simplification.
The ATO also allows a choice of using the GAM for certain specified low-value items (e.g., those costing less than $1,000).

How it works:

Pool your eligible second-hand purchases together.
Accumulate your GST credits as you purchase and resell.
Offset them against the GST payable on your onward sales.

You effectively build a GST “ledger” for your second-hand goods, crediting and debiting as you buy and sell. It’s particularly helpful for businesses dealing with high volumes of second-hand stock—like electronics recyclers, auction houses, or second-hand car dealers.

What About Imported Second-Hand Goods?

Thinking of sourcing your second-hand stock from overseas? Importing vintage, refurbished, or used goods from other countries can be a great business model, but it comes with its own GST twist.

GST applies to imported second-hand goods if:

They’re worth AUD 1,000 or less, and
The overseas supplier, marketplace, or freight forwarder is registered for GST in Australia.

If you buy from a major platform like eBay or Amazon, you’ll often see GST already added at checkout. If not, you might have to pay it at customs clearance before you get your goods released.

Final Thoughts

Second-hand goods are a smart, sustainable, and growing part of the economy—and understanding how GST fits into the picture only makes you sharper. To sum it up:

Does GST apply to second-hand goods in Australia?
Absolutely—when certain conditions are met.
Is it worth getting second-hand items if you’re a business?
Yes, especially if you’re eligible to claim GST credits under Division 66.

Knowing how GST applies to second-hand purchases can save you money, protect you from mistakes, and give you more confidence in your bookkeeping. If you’re not sure whether you’re handling it correctly—or if you’re wondering when to register for GST in the first place—it might be time to speak with a tax professional.

Simplify GST with Expert Support

At Denis Cummins Public Accountants, we understand that dealing with GST—particularly the rules around second-hand goods—can get complicated. With over 30 years of experience supporting individuals and small businesses across Camden, Narellan, and beyond, our team is committed to offering clear, practical guidance based on your specific financial needs.

Our services cover taxation, accounting, financial planning, and strategic advice—giving you the tools and confidence to make informed decisions. Whether you’re a sole trader, a growing business, or simply looking for reliable advice, we’re here to help every step of the way.

Ready to take the stress out of GST and strengthen your financial position?