Just a reminder that GST is now a query of every Residential contract dated on & post 1/7/18.
Not just the obvious ‘new land or new builds’, since ‘New Residential Premises’ under the Taxation administration act, may still be quite aged properties!
“The term ‘new residential premises’ is defined in s 40-75 of the GST Act:
Residential premises are new residential premises if they:
a. have not previously been sold as residential premises and have not previously been the subject of a long-term lease; or
b. have been created through substantial renovations of a building; or
c. have been built, or contain a building that has been built, to replace demolished premises on the same land.”
The AICWA have created a ‘Seller’s Notice to Buyer’ seems to be more direct about if GST is applicable or not?
Either way this new ruling is not well known, nor tested so watch this space as it is likely to develop further as time goes on.
Some highlighted changes to the 2018 version of Joint Form of General Conditions (JFGC), might mean that you could see some differences to the 2011 JFGC.
Please note, we are not lawyers and are merely relaying some discussions as generically covered in an industry forum.
The biggest concern was the 'Lawyers picnic' referenced as clause 9.3, where opposing lawyers could argue just about any outcome they desired, for a breach of warranty.
Service by email still needed to be 'signed' and in writing, so as an attachment to an email is most likely outcome.
The Buyers 'Right to inspect' was arguably removed, unless there was a Seller obligation or condition of the contract, then that additionally included a right to re-inspect, to check if Seller has rectified an identified issue, under the contract.
Early Possession remained the same if under one (1) month. However the REIWA JFGC-18 states that Parties must comply with the Residential Tenancy Act (RTA) if Possession was granted for period of one (1) month or more.
Which differs from the RTA which specifies a minimum of three (3) months.
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.
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.
Budget 2017 Update
GST On New Residential Purchases
From 1 July 2018 the Federal Government will require all purchasers of new residential premises (new builds) to remit the GST component previously provided by developers/builders directly to the ATO as part of the property settlement process.
Little is known of the changes other than what has been recently posted on the ATO website HERE
Keep me updated, join us here...