Law Change to include GST payment at Residential Settlement
A new change for residential property purchases has been put in motion from 1 July 2018.
For contracts dated on or after 1st July 2018, purchasers of new residential premises or potential residential land may be required to withhold an amount from the price and pay that amount directly to the Australian Taxation Office on or before settlement.
The amount of GST to be paid generally will not change, however there are certain circumstances where the amount to be withheld must be calculated differently.
For property transactions, purchasers will need to:
- split the amount of GST from the total purchase price
- pay the GST component directly to the ATO by a disbursement at settlement
- pay the GST exclusive purchase price to the property developer (vendor).
This does not affect the sales of existing residential premises or new and existing commercial properties.
Property developers will need to give written notification to the purchasers when they need to withhold. The liability for the GST remains with the property developer and there are no changes to how property developers lodge their business activity statements.
If you would like more information on this law change or are entering into a residential purchase, feel free to contact our Conveyancing team at firstname.lastname@example.org or call 1300 HATZIS (1300 428 947).