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ARTICLE · 08 JUNE 2017

E-alert: Crackdown on developer compliance with GST requirements

Broadley Rees Hogan Lawyers
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This measure will impact developers of residential properties where the sale of the stock gives rise to a taxable supply.

AustraliaReal Estate and Construction
Tracy Carr
Tracy Carr
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The Federal Government has introduced a significant measure that will impact developers of residential properties in circumstances where the sale of their stock gives rise to a taxable supply.

Under the current law, it is the seller's responsibility to remit the GST component of the purchase price to the Australian Tax Office (ATO).

However, new legislation is currently being developed which will require purchasers of newly constructed residential properties or new subdivisions to remit the GST directly to the ATO as part of the process of settlement.

It has been reported that the change will alleviate 'phoenix activity', whereby developers transfer out all of their assets and liquidate the company, before GST is paid to the ATO.

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