The ATO have requested we not film our session today, however, they have confirmed that their scheduled webinar, filmed elsewhere, will still occur and will be made available for viewing in the coming days along with a podcast and literature on the new measure/remittance.
AICWA members who attended yesterday’s sessions will be acutely aware that the ATO are placing considerable responsibility on the purchaser’s conveyancer to ensure the supplier (developer’s) statement is correct. The responsibility is noted under draft Rule 58 of “The Purchaser’s obligation to pay an amount for GST on taxable supplies of certain real property” states:
58. It would be unreasonable for a purchaser to believe the correctness of a notice indicating they do not have to make a payment under section 14-250 if it is clear that the vendor is making a taxable supply of new residential premises. For example, if a purchaser enters into an ‘off-the-plan’ contract for newly constructed premises from a developer who is registered for GST, and there is a statement in the contract that the purchaser does not have to make a payment under section 14-250 because the premises are not new residential premises.
How does this affect me?
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.
How will you manage change in 2018?
Are you ready for:
What will the rest of 2018 serve up to conveyancers?
Don’t get left behind!
AICWA is proud to have partnered with sponsors and key industry stakeholders to deliver a broad calendar of training events. We are committed to assisting you by delivering quality training outcomes as well as providing regular updates. As the peak industry body representing conveyancers locally and nationally, our access to key industry stakeholders means we are best positioned to deliver the knowledge you need.
Source: 9th February AICWA Education e-Newsletter
The GST on property transactions measure has been introduced, as schedule 5 to the Treasury Laws Amendment (2018 Measures No. 1) Bill 2018.
The Government will strengthen compliance with the Goods & Service Tax (GST) law by requiring purchasers of newly constructed residential properties or new subdivisions to remit the GST directly to the Australian Taxation Office (ATO) as part of settlement. The measure will require the purchaser of newly constructed residential properties of new subdivisions to remit the GST on the purchase price directly to the ATO as part of Settlement for contracts on or after July 1, 2018.
You can access the legislation as introduced along with the explanatory materials by following this link HERE.
Makes me laugh that "the Federal Government will strengthen compliance" BY MAKING OTHER PEOPLE DO THEIR JOB!!!! Yet another coming tax trap for buyers of new properties. GST Withholding.
From 1 July 2018, the Federal Government will strengthen compliance with the Goods & Service Tax (GST) law by requiring purchasers of newly constructed residential properties or new subdivisions to remit the GST directly to the Australian Taxation Office (ATO) as part of settlement. Under the current law (where the GST is included in the purchase price and the developer remits the GST to the ATO), some developers are failing to remit the GST to the ATO despite having claimed GST credits on their construction costs.
The measure will require the purchaser of newly constructed residential properties of new subdivisions to remit the GST on the purchase price directly to the ATO as part of Settlement for contracts on or after July 1, 2018.
Landlords lose thousands in tax savings in new bill
It's no surprise therefore, that a bill slipped through unobtrusively on November 15 when the nation was focussed on the result of the same-sex marriage survey. However, many Australians who have bought a rental property this year or are thinking of buying a rental property will be affected by this change.
New Commonwealth Government legislation came into effect on 1 July 2017 requiring more information to be provided to the Australian Taxation Office (ATO) when ownership of a property changes. This applies to all buyers and sellers across Australia. The requirements are a COAG initiative to enable the ATO to develop consistent and comparable datasets in the national database, which will reduce tax error and increase tax compliance.
Every state and territory is implementing the data collection in accordance with individual state legislation. In Western Australia this initiative has been led by Landgate, supported by the Office of State Revenue.
Some quick facts you need to know:
On 1 July 2017, the proposed changes to the Foreign Resident Capital Gains Withholding (FRCGW) rate and threshold will take effect.
These changes will apply to contracts entered into on, or after 1 July 2017 for real property disposals where the contract price is $750,000 and above. The FRCGW tax rate will also change from the existing rate of 10% to 12.5%.
The existing $2 million threshold and 10% rate will still apply for any contracts entered into before 1 July 2017 even if they are not due to settle until after 1 July 2017.
The change to the threshold from $2 million to $750,000 will result in many more properties requiring a clearance certificate for exemption of the withholding. The Australian Taxation Office (ATO) can only grant clearance certificates to a seller who is an Australian resident.
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