The Australian Taxation Office (ATO) has announced changes to the way GST is collected at settlement.
According to the ATO, those purchasing new residential premises or potential residential land who are required to withhold part of the purchase price for payment (to the ATO) must submit a number of online forms. These forms include:
GST property settlement withholding notification:
this form covers various areas including contact details, property details, purchaser details, supplier details and an overall summary. The form can be submitted any time after you have entered into the contract and before the date of the withholding obligation is due. Generally, the due date of the withholding obligation is due on the settlement day; unless you are using an instalment contract. In this instance, the due date will be the date the first instalment is paid.
GST property settlement date confirmation:
this form is quite straightforward and requires you to check a yes or no box to the following questions:
- Have you completed the GST property settlement withholding notification form?
- Are you submitting the form as a purchaser or as a representative for the purchaser?
- Have the purchaser and/or supplier details changed since the GST withholding notification form was lodged?
The form can be submitted at the due date of the withholding obligation. This will be at the time of settlement or when the first instalment is paid.
In addition to understanding when the forms are due, you must consider the following:
- Those who hire a representative need to complete a signed declaration and send it to their conveyancer or solicitor. This will allow for the two forms to be submitted on the purchaser’s behalf.
- In regards to a standard land contract, it is required that the withholding amount is paid on the day of settlement unless an instalment contract is used. In this case, it is due when the first instalment (other than a deposit) is paid.
- Payment reference number should be included on all payments made.
For further information about GST changes and other related tax issues please contact our tax team at Leenane Templeton on (02) 4926 2300.