GST CHANGES IMPACT ALL RESIDENTIAL PROPERTY TRANSACTIONS, NOT JUST NEW PREMISES!

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Further to our post of 25 May 2018 on “Changes to GST on Residential Property Transactions”, we advise the following:

Although the GST withholding obligation applies only to new residential premises (or new subdivisions of potential residential land by way of sale or long term lease), the notification requirement applies to all vendors of residential premises, i.e a vendor selling the family home.

Vendor’s are now required to provide a Purchaser with written notice advising whether the purchaser needs to withhold GST.  If a Purchaser is required to withhold the GST and remit it to the ATO, the written notice must include the Vendors Name and ABN.  

Some Contracts of Sale are being updated to include the written notification requirement.

Vendors must be vigilant and comply with the new requirement as the following penalty applies to the Vendor for noncompliance:

  •  Vendor Penalty:  The requirement to notify the purchaser is a strict liability offence and a court may impose a maximum penalty of 100 penalty units for individuals ($21,000) or 500 penalty units ($105,000) for corporations.

If you would like to discuss this further, please contact our office.