From 1 July, 2018 onwards, purchasers of new residential property or subdivisions of potential residential land will need to pay the GST component of the purchase price directly to the ATO.
This change does not impact on the sale of existing residential properties or the sale of new or existing commercial property.
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 vendor (property developer)
Settlements will not be conditional on the payment of the GST to the ATO and your solicitor will be able to assist with the form and payment to the ATO as a normal part of the conveyancing process.
The Vendor/Developer will be obliged to provide a notice to the purchaser which includes:
- Name and ABN of the supplier/developer
- The amount of GST that the purchaser will be required to pay to the ATO
- When the amount is due to be paid to the ATO (i.e. settlement date)
- Where some or all of the consideration is not expressed as money – the GST-inclusive market value of the consideration not expressed as money (i.e. in kind consideration)
The liability for the GST remains with the property developer. For the developer, there will be no changes to how they lodge their BAS.
If you need assistance or further information please contact our office.
