GST Withholding on Residential and Potential Residential Property

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Oct 15, 2019 | Posted in Business Advice
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Since 1st July 2018 purchasers and vendors of new residential property and potential residential property have had new obligations imposed at the point of settlement.

Essentially, the collection point for the GST upon sale of a new residential or potential residential property has moved forward to settlement rather than upon BAS lodgment by the vendor.

Purchasers are required to withhold the GST and pay it directly to the ATO at settlement.

Vendors are required to provide notification of the GST status of the property they are selling so that the purchaser can make the above payment, this requirement exists even if there is to be no GST paid.

This measure has hit the cash flow of property developers as well as caused significant complexity for agents and solicitors during contract negotiations and settlement.

DarylCorpe
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