2018/19 Tax Update: GST withholding measures have now passed into law
From 1 July 2018, purchasers of new residential premises and new residential subdivisions will be subject to recently passed legislation intended to 'clamp down' on GST evasion in the property development sector. These new obligations are primarily in response to the practice by some developers which have been collecting GST on new properties before dissolving their business prior to remitting that tax to the ATO.
Purchasers will now generally be obliged to withhold the GST on the purchase price at settlement and pay it directly to the ATO. Property developers will also need to give written notification to purchasers regarding whether or not they need to withhold.
If you intend to purchase a new property in the new financial year, please do not hesitate to contact us for advice on whether you will now need to withhold the GST portion of the purchase price.