Paying the levy for a building permit application or prior to commencement of construction
The CTF Levy is 0.2% of the estimated value of construction work including GST.
If your contract includes value for at least each of the relevant components below, the total contract price including GST is the value of construction work.
The value of construction works may be the sum of the value of the relevant components including GST if:
- your building and construction work is undertaken through multiple contracts, or
- your building and construction work is not undertaken in a contract, or
- your contract does not include value for at least each of the relevant components below.
Relevant components
The components relevant to the value of construction work:
- profit margin
- all goods (including manufactured goods) forming part of the construction work
- labour
- services necessary
- fees payable
- overheads to be met
What if some of the goods that form part of the construction work that are GST-free?
Some goods imported into Australia are not subject to GST. You should exclude the GST components for the goods that were not subject to GST in your calculations.
What kinds of labour are included?
The labour component must include the value of skilled and unskilled labour and any other labour involved in close monitoring and supervision of the building and construction work. This includes the value of professional advice relating to design, certification, engineering, etc.
What if some or all of the labour or services are provided at no cost, are free of charge, or are undertaken yourself?
The current reasonable market rate or value should be used.
What if my contract does not include value for the goods? E.g., some or all of the goods are provided at no cost, are free of charge, are free-issued, or are re-used
The value of the construction work must include all relevant components as listed in Schedule 2 of the Act, this includes goods (including manufactured goods) used as part of the construction work.
The value of the goods may be:
- the purchase price if the goods were purchased,
- the hire price over the hire agreement period or expected period of use if the goods were hired, or
- the current market value (depreciated value) of the goods if the goods were re-used e.g., re-used transportable buildings where there is no change of ownership, depending on the specific circumstance or contract arrangement.
Please contact us and we can provide additional guidance.
What happens if my contract includes some works that are not normally subject to the levy?
If your contract includes some works or components that outside the contract would not be subject to the levy, the levy applies to the total contract price.
Example: Construction of a park with hard and soft landscaping.
If you have a contract for soft landscaping only, the levy does not apply. If your contract includes both hard and soft landscaping, and the contract includes value for at least all the relevant components (goods, labour, services, fees, overheads and profit margin) for the hard landscaping, the levy is payable for the contract price.
Do I need to include insurance fees into the value of construction work?
Levy is payable on the Builder’s Insurance. It is included as a fee that is a relevant component to the value of construction work in Schedule 2 of the Act.
What if I do not have a profit margin for the construction work?
Where the construction work is undertaken at a loss or as a capital investment by the Project Owner, the profit can be zero.
What types of overheads should be included in the calculation?
The levy is payable on overheads associated with construction work, including but not limited to transport cost for goods and labour to the site and equipment hire.
What services should be included in the calculation?
Levy is payable for services directly associated with the works to which the levy applies including but not limited to traffic management, temporary fencing, skip bin hire, site security, dewatering of the site.