ATO are changing GST collection on some property transactions.
June 25, 2018
The Australian Taxation Office (ATO) are changing the way they collect goods and services tax (GST) during the settlement process on some property transactions.
From 1 July 2018, buyers who purchase new residential premises or potential residential land will need to withhold an amount from the purchase price and pay it directly to the ATO on or before the settlement date.
If you are a property developer, you will need to let the buyer know when they sell the residential premises or potential residential land if they need to withhold an amount. This information can be included in the sale contract or in a separate document. The details required to be included are:
> your name and Australian Business Number;
>the amount the buyer needs to withhold and pay to the ATO;
>when the buyer needs to make the payment;
> if the purchase includes a non-cash payment (such as land swaps), the GST-inclusive market value of that part of the payment;
>other information as stated in the regulations.
You do not need to tell the buyer of these changes if they are selling a commercial residential premises or potential residential land where the buyer is GST-registered business purchasing the property for a creditable purpose.
The GST rate and the way BAS is lodge remains the same.