The Australian Taxation Office (ATO) has announced changes to the way GST is collected at settlement.
According to the ATO, if you are purchasing new residential premises or potential residential land you are required to withhold part of the purchase price for payment (to the ATO) must submit a number of online forms.
These forms include:
GST and new residential property settlement withholding notification
This form covers various areas including contact details, property details, purchaser details, supplier details and an overall summary. The form can be submitted any time after you have entered into the contract and before the date of the withholding obligation is due. Generally, the due date of the withholding obligation is due on the settlement day; unless you are using an installment contract. In this instance, the due date will be the date the
first installment is paid.
GST and new residential property settlement date confirmation
This form is quite straightforward and requires you to check a yes or no box to the following questions:
- Have you completed the GST property settlement withholding notification form?
- Are you submitting the form as a purchaser or as a representative for the purchaser?
- Have the purchaser and/or supplier details changed since the GST withholding notification form was lodged?
The form can be submitted at the due date of the withholding obligation. This will be at the time of settlement or when the first installment is paid.
In addition to understanding when the forms are due, you must consider the following:
- Those who hire a representative need to complete a signed declaration and send it to their conveyancer or solicitor. This will allow for the two forms to be submitted on the purchaser’s behalf.
- In regards to a standard land contract, it is required that the withholding amount is paid on the day of settlement unless an installment contract is used. In this case, it is due when the first installment (other than a deposit) is paid.
- Payment reference number should be included on all payments made.
If you have any questions about GST and new residential property contact the Walshs team on 07-3221 5677.
As this advice is general in nature please do not hesitate to contact one of our adviser accountants or financial planning advisers if you have a query that is specific to your circumstances.