Buyers of new residential premises or subdivisions of potential residential land will need to pay the GST component of the purchase price to the Australian Tax Office (ATO) as of 1 July 2018.
The amount of GST will not change. This change does not affect the sales of existing residential properties or the sales of new or existing commercial properties.
Buyers will need to split the amount of GST from the total purchase price, pay the GST component directly to the ATO by a disbursement at settlement and pay the GST exclusive purchase price to the vendor.
It is important to note settlements will not be conditional on the payment of GST to the Tax Office.
It is the property developer’s responsibility to provide written notice to the buyers when they need to withhold.
The liability for GST remains with the property developer.