Show download pdf controls
  • How the measure will work from 1 July 2018

    Step 1: Supplier notification

    A supplier must not sell any residential premises (new or otherwise) or potential residential land unless the purchaser has been notified in writing whether there is a requirement to withhold.

    If the property being sold is excluded from the withholding obligation (for example, because it has been sold previously), the supplier notification must be clear that 'no withholding is required'.

    The supplier notification may be:

    • included in the sale contract; or
    • in a separate written agreement.

    The onus is on the supplier to inform the purchaser correctly or penalties may apply.

    There is no requirement for the supplier to notify if the supply is of:

    • commercial residential premises (hotels, motels, etc)
    • potential residential land to a GST registered purchaser who acquires the land for a creditable purpose (for example, to develop new strata units on the land and sell them as new residential premises).

    If the purchaser must withhold, the supplier must provide additional information in the notification given to the purchaser including:

    • the name and ABN of the suppliers
    • the amount the purchaser is required to withhold and pay us
    • when that amount needs to be paid
    • if the payment for the property purchase includes non-monetary consideration (for example, land swaps), provide the GST inclusive market value of that part of the payment
    • other information as specified in the regulations.

    Step 2: Purchaser forms

    There are two online notification forms the purchaser or their representative needs to lodge:

    • Form 1: GST property settlement withholding notification online form – enables a withheld amount to be paid to us. A purchaser or their representative must notify us prior to settlement the details of the parties to the contract and the property. Once the online form is submitted, we will provide a unique payment reference number (PRN) and a lodgment reference number (LRN). This form can be lodged any time after a contract has been entered into and prior to the settlement date.

    Once the confirmation form is submitted a lodgment confirmation will be issued automatically to the purchasers (or representative's) email address, or can be printed from the screen.

    The information needed to complete Form 1: GST property settlement withholding notification online form will be contained in the contract of sale and the suppliers' notification. This information will allow the purchaser's withholding payment to be credited to the correct supplier.

    • Form 2: GST property settlement date confirmation online form – to be lodged on or before the date of settlement. The purchaser or their representative must notify us (using the PRN and LRN) confirming property settlement date, and then pay the withheld amount.

    Note: Even if the supplier has failed to provide a written notification, there is an obligation on a purchaser to lodge the two online forms, withhold and remit to us unless it is reasonable not to do so (for example, because the sale of property is not taxable).

    Step 3: Payment

    Using the PRN, the purchaser will then pay the withheld amount directly to us. The purchaser will receive an email confirmation once the payment is processed, as proof of payment for their records.

    The credit will be transferred to the suppliers GST property credit withholding account. Once the payment has been credited, the supplier will then receive email confirmation.

    Step 4: Business activity statement (BAS)

    The supplier lodges their BAS when it is due and reports the taxable sale along with:

    • any other supplies
    • acquisitions
    • GST liabilities
    • GST input tax credits.

    When the BAS is lodged the credits in the GST property credit withholding account will be automatically transferred to the suppliers activity statement account. This will apply the withholding credits against the supplier's BAS net amount.

    Any surplus credits from the activity statement account will be refunded (subject to normal GST refund processes) or if a further amount of GST is payable, the supplier will remit that amount if it hasn't been paid already.

    Note: The credit will not be made available until the supplier has lodged their next BAS and it has been processed.

      Last modified: 15 May 2018QC 55431