From 1 July 2018, purchasers of new residential premises or potential residential land will be required to withhold an amount from the price for the supply and pay that amount to us on or before settlement.
The property transactions impacted are taxable supplies (for example, sales and supplies by way of long term lease) of new residential premises or taxable supplies of potential residential land where the contract is entered into before on or after 1 July 2018.
To provide certainty to purchasers, a supplier (vendor, seller, etc) of residential premises or potential residential land must notify in writing whether a purchaser is required to withhold an amount. If the purchaser is required to withhold, the supplier must also notify the purchaser what that amount is and when it needs to be paid to us.
The general rule is that if the property sale contract specifies an amount that is the price of the supply (for example, the contract price) then the withholding amount is calculated on the contract price. However, there are some situations where the amount to be withheld must be calculated differently.
This law change does not affect the supplier's obligation to lodge their Business activity statement (BAS) and report their GST liabilities or entitlements on taxable supplies of these types of properties.
Once the supplier lodges their BAS and it is processed, the supplier will receive a credit of the amount the purchaser withheld and paid to us.
The transfer of the legal title of the property following settlement of a sale is a matter for the parties to the sale contract. The changes do not require the withholding amount to be paid to us before a title transfer can be registered with the relevant State or Territory agency.
Purchasers do not need to register for GST just because they have a withholding requirement.
We will review your particular situation and calculate the amount of GST to be withheld.
At Central Victoria Conveyancing, as Victorian farmers and former city dwellers, we understand all your Victorian country, suburban and city property concerns. We are with you all the way through your transaction, we are always available to discus any concerns or questions you may have in a friendly and easy to understand way with no unnecessary legal jargon.
Whether you are a first home buyer or looking to upsize or down size from your current home, a business looking to buy or sell, a developer looking to subdivide, an investor looking for your best options, or a farmer selling land ( we can help with water shares too), our team at Central Victoria Conveyancing can help you with advice and legal professional property services to suit your requirements and needs.
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