AGS
Level 4, 183 Wickham Terrace Brisbane QLD 4001
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Level 4, 183 Wickham Terrace Brisbane QLD 4001
(1800) 217 217 Free case consultation

Buyer Alert! New GST Withholding Laws for Buyers and Developers of New Residential Property

In our Previous Article ATO Property Update For GST we introduced the new set of rules affecting Buyers and Developers of new residential premises and new residential subdivisions which will be in place as of 1 July 2018. The new laws will require the General Services Tax (GST) amount payable on the purchase price of new […]

Buyer Alert! New GST Withholding Laws for Buyers and Developers of New Residential Property

Buyer Alert! New GST Withholding Laws for Buyers and Developers of New Residential Property

In our Previous Article ATO Property Update For GST we introduced the new set of rules affecting Buyers and Developers of new residential premises and new residential subdivisions which will be in place as of 1 July 2018. The new laws will require the General Services Tax (GST) amount payable on the purchase price of new residential premises to be withheld at settlement and paid directly to the Australian Taxation Office (ATO).

Who is to Pay

A Buyer of a new residential premises or potential residential land will be required to withhold the GST amount from the Seller and pay this directly to the ATO.

A new residential premises includes a property that has not previously been sold as a residential premises.
Potential residential land includes land that is included in a property subdivision plan.

Amount to be withheld

A Buyer will be required to withhold 1/11th of the purchase price of a property and pay this directly back to the ATO.
If the Margin scheme applies to the transaction then 7% of the purchase price will be required to be withheld at settlement and paid directly to the ATO. However, this amount may increase up to 9% as determined by the Minister.

When is the GST to be Paid

The amount of GST required to be withheld must be paid to the  on or before the settlement date. As your Brisbane Conveyancing expert about this.

Obligations on Developers

Developers will be required to give written notice to the buyer advising the buyer if they are required to make a payment to the ATO. If the buyer is required to withhold GST then the notice must include:

  • Amount the buyer is required to pay to the ATO; and
  • When they are required to pay that amount.

Failure to comply with this obligation can result in fines up to 100 penalty units (currently $21,000).

Obligations on the Buyer

If GST is required to be withheld and paid to the ATO the Buyers are responsible for paying this amount to the ATO. If a Buyer fails to do this they may be required to pay a penalty to the ATO equal to the amount of the GST required to be withheld.

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Jackson Elliott
Jackson Elliott

5 months ago

IAN FIELD is awesome at staying on top of things. All are very professional, kind, knowledgeable, and I've had nothing but pleasant experiences with this firm. I have recommended them to others and will continue to recommend their services. thanks

Mana S
Mana S

3 months ago

Worked with Mr Ian Field and Mrs Elise Foote as our mediators. Very disappointed with the service. The process lasted way more than expected and obviously we were charged much more than estimated. The delay caused much more stress rather than helping us to resolve the problem and they didn’t seem to feel responsible enough to care about it. They had many mistakes that we had to correct them which shows they didn’t spend enough time on it and even part of the job remained kind of unresolved and they kind of left me alone without caring about it. I would not recommend them at lest in family matter.

Anita Loader
Anita Loader

5 months ago

I wanted to pass on my thanks to all at Aylward Game, especially Mark Kenny, Shonae Morrison and Allyce Ardern, for all the assistance they have given over the past 6 weeks. As a very novice property purchaser, the professionalism, advice, hand holding, responsiveness and above all patience were so very much appreciated and made what could have been a very stressful time, a very easy process (well, for me at least, maybe not for them!) Who knows, if this venture goes well, it may not be the last they hear of me.... Apologies in advance! 😳

Lawrence Carneal
Lawrence Carneal

9 months ago

Not many firms can compete with the skill and performance that Aylward Game have - I am a very happy camper... fast turn around and diligent research on my property matter thanks to Mark Game.

Cam Smith
Cam Smith

11 months ago

10 out of 10 and 5 star service... when it comes to property conveyancing Brisbane - they will not be beaten as far as support. Yes you can probably save a few bucks elsewhere - but you won't get the same attention to detail and support anywhere else! Thanks also to Allyce for helping deal with the selling side (which sounded tough)

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