2018 gst changes for property transactions
The ATO is changing the way they collect goods and services tax (GST) on some property transactions during the settlement process.
From 1 July 2018, buyers who purchase new residential premises or potential residential land need to withhold an amount from the purchase price and pay it directly to the ATO on or before settlement.
There are transitional rules that apply to some contracts.
How the change may affect you.
If you are a property developer, you need to let the buyer know when you sell residential premises or potential residential land if the buyer needs to withhold an amount. You can include this information in the sale contract or in a separate document.
If the buyer needs to withhold an amount, you must also include the details listed below:
You don’t need to tell the buyer if you are selling:
Once the buyer has paid the amount, the ATO will make a credit available to you in a GST property credit account and send you an email to confirm this. The ATO will apply this credit against your activity statement account once you lodge your business activity statement (BAS).
There are no changes to the GST rate or the way you lodge your BAS.