The Treasury Laws Amendment (2018 Measures No. 1) Bill 2018 was passed on 29 March. Under Schedule 5 of the Bill, purchasers of real estate may be required to withhold GST on the purchase price of new residential premises and new residential subdivisions and remit the GST directly to the ATO on settlement.
Generally, these new rules apply to contracts entered into on or after 1 July 2018.It does not affect the sales of existing residential properties or the sales of new or existing commercial properties.
The AICWA has teamed up with the ATO to deliver 4 FREE information sessions exclusively for its members. A post session transcript wrap-up as well as a video will be circulated to any AICWA members unable to attend.
For impacted property transactions:
- The purchaser will receive a written notification from the supplier (vendor) including:
- the amount to be withheld,
- the name and ABN of the developer,
- the GST inclusive market value of any non-monetary consideration and any other matters that are specified in the regulations.
- The purchaser or their representative will withhold the specified amount from the total purchase price and pay this directly to the ATO on or before settlement. The balance of the price will be paid to the supplier.
Note: PEXA are working behind the scenes to facilitate payment to the ATO
- The purchaser or their representative (conveyancer) will be required to complete two new ATO online forms.
- A penalty levied on the purchaser for non-payment of the GST to the ATO is expected to ensure high rates of compliance.
- The supplier can incur a penalty if they fail to give the required notice in writing to the purchaser.
- An ATO conveyancer/solicitor guide on GST at settlement will be developed over the coming months and will be made available from the ATO website
To find out more about these changes visit the ATO website.
Source:4th May 2018 AICWA e-Newsletter