ARTICLE · 02 DECEMBER 2017

GST changes on new residential premises and subdivisions

ClarkeKann Lawyers

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This draft legislation shifts responsibility for paying GST on new residential premises from developers to purchasers.

AustraliaTax

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The Federal Government has recently released draft legislation that will shift responsibility for paying GST on new residential premises from developers to purchasers. The proposed legislation is being introduced to target 'phoenix operators', who collect GST from purchasers but then become bankrupt before remitting this GST to the Australian Tax Office ("ATO"). These unfortunate scenarios arise as developers are currently only obligated to pay the GST collected from customers to the ATO in the ordinary course of their business. From 1 July 2018 (providing the legislation is passed), purchasers will be required to retain the GST portion of the purchase price and pay this directly to the ATO.

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