ARTICLE · 17 APRIL 2018

Tightening of GST compliance for developers

Coleman Greig Lawyers

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Article discusses changes in collection of GST payments as a result of tightening up GST compliance for developers.

AustraliaTax

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As part of the 2017-18 Federal Budget, Treasury announced its intention to tighten up GST compliance within the residential property development sector. The changes in the collection of GST payments include new GST withholding obligations on the part of purchasers, together with notification obligations for developers.

Following the assent of the Treasury Laws Amendment (2018 Measures No. 1) Bill 2018, effective from 1 July 2018, purchasers will now bear the responsibility of paying the GST component of the sale price for a new residential premises (including new residential units, the subdivision of land into residential lots and the sale of home and land packages) to the Australia Taxation Office (ATO) directly. This means that the purchaser will now hold onto 1/11th of the purchase price and make payment to the ATO either at or before to the settlement of the transaction.

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