GST at Settlement

From 1 July 2018, the ATO introduced legislation relating to payment of GST by a purchaser on new residential premises or potential residential land.

Prior to 1 July 2018, if GST was applicable on a transaction, a purchaser would pay the purchase price including the GST to the Vendor at settlement. The Vendor would then pass on the GST component to the ATO at the time of completing their quarterly BAS. But now, the purchaser is required to pay the GST amount direct to the ATO at settlement and the balance of the purchase price to the Vendor.

If you are a property developer or a GST registered entity selling new residential premises or potential residential land, then this legislation will affect you. Likewise, if you are a purchaser who is purchasing new residential premises or potential residential land from a property developer or a GST registered entity, the obligation is now on you to pay the GST component to the ATO direct at settlement. You may incur penalties if you fail to lodge the necessary paperwork and make the payment to the ATO.

Our conveyancers at Clelands, we will handle all the necessary paperwork and payment to the ATO to ensure you comply with your obligations under this legislation at settlement.

To determine whether GST at settlement affects you and the property you are dealing with or if you would like Clelands to attend to your conveyancing requirements, please contact our Registered Conveyancers, Veronique Babczynski or Libby Abbot on 08 8177 5888 to discuss.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.