• New GST rules – Purchaser GST withholding on sales of new residential premises

Under the current GST law, GST is included in the purchase price of new residential premises and new potential residential land and the supplier/developer remits that GST to the ATO in their Business Activity Statement (BAS) for the tax period in which the supply occurs. In some cases (i.e. quarterly remitters) the GST on the supply is not remitted until three months after settlement.

As a result of ‘phoenixing’ activities, whereby some suppliers/developers have been collecting GST from purchasers on sales of property and not remitting it to the ATO, the Government announced counter legislative measures in the 2017-18 Budget.  The Government announced that under these counter measures, from 1 July 2018, purchasers of new residential premises or new potential residential land (e.g. new lots in new residential subdivisions) would remit the GST on the purchase price directly to the ATO as part of the settlement process. 

On Monday 6th November 2017 for the purposes of public consultation, the Government has issued an Exposure Draft of amending legislation Treasury Laws Amendment (2017 Measures No. 9) Bill 2017 and a draft Explanatory Memorandum to this Exposure Draft.