Purchasing or selling your home? – New GST Withholding Regime 2018
The Government has introduced a new GST Withholding Regime to take effect from 1 July 2018. The change will affect buyers and sellers of new residential premises including new residential vacant land, newly constructed units/townhouses or newly constructed house and land packages.
From 1 July 2018 a seller must provide a notice to the buyer if the property being sold is captured by the GST Withholding Regime. The Buyer must then withhold the GST and pay the GST amount to the ATO on or before settlement.
The new regime is designed to combat phoenixing, where developers complete residential developments and then declare the company insolvent without remitting the required GST from their sales.
See: https://www.ato.gov.au/Business/GST/In-detail/Your-industry/Property/GST-at-settlement/ for further detail.
A short video created by the ATO can also be viewed here https://www.ato.gov.au/newsroom/smallbusiness/gst-and-excise/changes-to-gst-on-property-transactions/?utm_source=QLS+newsletters+list+%7C+2017&utm_campaign=7fcf8c8fcc-qls-update-16May2018&utm_medium=email&utm_term=0_e21c5fd41e-7fcf8c8fcc-183233329