Changes to GST Withholding for Residential Property | Sunshine Coast Property Law
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On 1 July 2018, amendments were made to the way GST on the sale of some new residential property is paid to the Australian Taxation Office.
In this video John Gallagher from Argon Law discusses these changes and how they impact on residential conveyancing.
These changes only affect a limited number of transactions, namely sales of:
new residential properties;
vacant land in new residential subdivisions; and
long-term leases over new residential properties - something that is common in newly established retirement villages.
For the conveyancing process, what has changed is:
the ATO must be notified of the transaction before settlement so a payment request can be generated;
the ATO must be told when settlement is to occur; and
payment of the GST component of the purchase price must be issued from the settlement funds directly to the ATO.
Those steps require the Buyer (or their lawyers) to lodge two electronic forms with the ATO at different stages of the transaction.
There are a number of exceptions that apply. The changes don’t apply to the sale of new residences created through substantial renovation. And they don’t apply to transactions entered into before 1 July 2018 which settle before the transitional period expires on 1 July 2020.
Special note should be taken of the transitional provisions. If a new residential disposal is entered into before 1 July 2018, but settles after 1 July 2020, it will be caught by the new regime. This will no doubt affect many off-the-plan sales.
Do you require legal advice? Contact Argon Law via the links listed below.
You can find us at http://www.argonlaw.com.au/.
Please feel free to contact us at [email protected] / 07 5443 9988
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