Changes to GST payments at settlement

From 1 July 2018, purchasers of new residential premises or subdivisions of potential residential land will need to pay the GST component of the purchase price directly to ATO on or before settlement.

The amount of GST will not change.

This does not affect the sales of existing residential properties or the sales of new or existing commercial properties.

For property transactions, purchasers will need to:

· split the amount of GST from the total purchase price

· pay the GST component directly to ATO by a disbursement at settlement

· pay the GST exclusive purchase price to the property developer (vendor).

· Settlements will not be conditional on the payment of GST to us.

· Property developers will need to give written notification to the purchasers when they need to withhold.

· The liability for the GST remains with the property developer, and there are no changes to how property developers lodge their business activity statements.

For further information please contact your RCB Advisors team member.

Source: www.ato.gov.au