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GST withholding

Earlier this year, GST laws were amended to require specified purchasers to withhold GST amounts from the sales price and remit that amount to the ATO.  We have compiled a list of the most important facts relevant to this change in the law.

Q: From when will this law come into effect?

A: From 1 July 2018

Q: What if I signed a sales contract before 1 July 2018 but settlement is after that day?

As long as you settle (by paying full consideration) before 1 July 2020 you will be excluded from the new GST withholding regime.

Q: Do all purchasers have to withhold GST and remit to the ATO?

A: No, for the most part it is only purchasers of new residential premises or subdivisions of potential residential land who are also not registered for GST*

Q: When do I have to pay the GST amount to the ATO?

A: On or before settlement.

Q: Does the vendor need to provide me with details to assist me with payment?

A: Yes, the Vendor needs to provide you with written notice of:

(i)           the Vendor’s name and ABN; and

(ii)         the amount that you (the purchaser) will be required to pay to the ATO; and

(iii)        when you will be required to pay that amount; and

(iv)       if some or all of the consideration for the purchase is not expressed as money, the GST inclusive market value of so much of the consideration as will not be expressed as an amount of money; and

(v)         other matters specified in the regulations.

The above summary is meant only as a general overview of the new GST withholding laws. For more information on property law and other commercial matters please contact Shavin Silva at Pace Lawyers on (08) 8410 9294 or vie email with this form.

* The Treasury Laws Amendment (2018 Measures No. 1) Bill 2018 covers a few other uncommon situations.