About the event
On the 7 February 2018, Treasury Laws Amendment (2018 Measures No. 1) Bill 2018) was introduced into Parliament.
Key elements of the ‘GST at settlement’ measure include –
- On or after 1 July 2018, purchasers of new residential premises and residential land subdivisions will withhold the GST amount on the contract price and pay this directly to the ATO as part of the settlement process.
- The purchaser will remit 1/11th of the contract price to the ATO and the remaining money to the property developer (supplier), or a lower 7 per cent rate of withholding where the margin scheme applies.
- Transitional provisions allow contracts signed before 1 July 2018 but which settle before 1 July 2020 to be excluded from this measure. This provides certainty for contracts that have already been signed.
- Some properties are excluded from the requirement to withhold, including substantially renovated premises, commercial premises and business to business vacant land transactions.
- A deeming provision has been put into the draft law to prevent unintended consequences for parties to existing property development agreements.
- There are no changes to the way the business activity statement is lodged. The liability for the GST remains with the property developer.