There are changes to GST on property transactions which require certain purchasers of new residential premises or potential residential land to pay the GST amount directly to the ATO. Property developers are required to give written notification to purchasers when they need to withhold an amount for GST. The notification can be part of the contract of sale or a separate notice.
This will change the way the GST is collected on these transactions as property developers will no longer collect the GST and then pay it to the ATO.
The ATO has not made any changes to the amount of GST charged and purchasers for these property transactions are not required to be registered to pay the GST directly to the ATO.
The changes apply to contracts entered into on or after 1 July 2018.
The liability for the GST remains with property developers and there are no changes to how they lodge their business activity statements.
To find out more go to www.ato.gov.au/gstatsettlement, or have a chat with your tax agent, conveyancer or solicitor.
