GST Withholding – Vendor and Purchaser obligations to the ATO
If you are buying or selling a new residential property or block of land in a new subdivision there are now changes (from 1 July 2018) to how the ATO collects GST on these transactions.
- The supplier (vendor) must be registered for GST
- The supplier must notify the purchaser in writing how much the purchaser must pay the ATO at settlement
- The purchaser must lodge a Form 1 at the start of the transaction to the ATO
- Purchasers will then pay that GST directly to the ATO at settlement and lodge a Form 2 to the ATO
- The amount to be withheld will be one eleventh of the purchase price unless the Margin Scheme applies
- If the Margin Scheme applied the amount to be withheld will be 7% of the purchase price
- This does not affect the sales of existing residential properties, the sales of new or existing commercial properties, or purchasers who are registered for GST and are acquiring the land for a credible purpose (going concern)
If GST Withholding is relevant to your transaction you can be sure that Caitlin at Tas Conveyancing will assist you to meet your obligations to the ATO throughout the transaction upon settlement.