Debtor complaints to the Financial Ombudsman Service
(and others) about GST
In tough economic times it is very common for creditors to
enforce their powers to sell property to try and recoup some of
what they are owed. Property transactions can result in somewhere
between zero and 1/11th of the sale price going to the
Tax Commissioner – for big transactions this GST cost can be
a very large number.
The A New Tax System (Goods and Services Tax) Act 1999
(GST Act) says that a mortgagee is directly liable
to the Australian Taxation Office for whatever GST would have been
payable if the debtor had made the sale themselves.
That all sounds straight forward in theory, but the obvious
practical problem for mortgagees, and their professional advisors,
is working out what the GST position of the debtor would have been.
It should come as no surprise that by the time a mortgagee sale is
imminent it is often the case that the romance has well and truly
gone out of the
