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  • When suppliers have a notification obligation

    You have a notification obligation if you supply, by way of sale or long-term lease of either:

    • residential premises (new or old – not being commercial residential premises such as hotels or motels)
    • potential residential land to a purchaser who is not a registered entity acquiring the land for a creditable purpose.

    There is no requirement that the supply be a taxable supply.

    You must provide the written notice to the purchaser(s) on or before the time you make the supply. You can incorporate the notice into the contract, or you can provide it by separate notice.

    If the contract allows for a purchaser to be substituted for another entity, or the supply is made to a nominee, you may provide the notice to the entity listed on the transfer documents

    Note: If you fail to provide a written notice, it does not affect the purchaser's withholding obligation (if any).

    See also:

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    Content of notices

    Your notice must state whether or not your purchaser has a withholding obligation.

    If your purchaser does not have a withholding obligation your notice must make it clear that 'no withholding is required'.

    If your purchaser does have a withholding obligation then your notice must include:

    • your name and ABN (and those of any other suppliers)
    • the amount your purchaser must pay to us
    • the date your purchaser(s) must pay the withholding amount to us, and
    • the GST-inclusive market value of that property (but only if the consideration for the supply includes property).

    Note: Most standard land contracts are being updated to include the information required to discharge a supplier's notification obligations.

    If the required information changes after you have provided the notice to your purchaser, then you must provide a new notice.

    For example if there are changes to the contract price by reason of a variation, or a discount agreed with your purchaser that applies prior to completion.

    If you don't supply the correct information, this may cause delays in our matching the amount withheld to your Business Activity Statement (BAS).

    Supplier details

    You must provide 'supplier' details on the notice. If you are one of a number of suppliers then each supplier will need to be listed on the notice.

    The supplier can be an entity other than the person named on the contract or certificate of title. The supplier is usually the entity that is liable to pay the GST on the supply of the property.

    However, if the entity that has the GST liability is different to the supplier (for example where the supplier is a member of a GST group, other than the representative member) or is under external administration, then the details of the entity with the GST liability should also be notified to the purchaser.

    Purchaser's withholding obligation

    Your purchaser will have a withholding obligation if your supply is a taxable supply, by way of sale or long-term lease where any of the consideration (other than a deposit) is first provided on or after 1 July 2018, of either:

    • new residential premises
    • potential residential land included on a property subdivision plan

    Note: Residential premises cease to be new residential premises if they have been used solely for renting for a period of at least five years since they were constructed.

    Transitional arrangements apply to contracts entered into before 1 July 2018.

    A supply of new residential premises or potential residential land in Australia will be a taxable supply if you are registered or required to be registered for GST and the supply is:

    • made for consideration
    • made in the course or furtherance of an enterprise you carry on
    • not a GST-free or input taxed supply (for example, a supply made as part of a GST-free supply of a going concern or a supply of GST-free farmland).

    See also:

    I'm selling my family home

    If you are not carrying on an enterprise and are not registered for GST (or required to be registered for GST), you will not be making a taxable supply when you sell your family home.

    In these circumstances your purchaser will not have a withholding obligation and the only notice you will need to provide to your purchaser is to advise them that they do not have a withholding obligation. This can be provided in a contract or a separate written notice.

    Excluded supplies

    There is no withholding obligation on the following supplies of new residential premises or potential residential land that is:

    • new commercial residential premises (for example, hotels and motels)
    • existing residential premises that have been substantially renovated
    • potential residential land that contains a building that is currently in use for a commercial purpose (for example, a factory or shop being operated in an area where local zoning permits mixed use)
    • potential residential land supplied to a GST registered entity for a creditable purpose.

    See also:

      Last modified: 07 Aug 2018QC 56252