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  • Supplier notification

    You must notify the purchaser in writing before settlement of whether or not they have a withholding obligation – this is called a 'supplier notification'.

    You have a notification obligation if you supply a long-term lease or sell:

    • residential premises
    • land that could be used to build new residential property ('potential residential land') to a purchaser who is not a GST registered entity acquiring the land for a creditable purpose.

    If the contract allows 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.

    The notification can be included in the sales contract or in a separate document before settlement. All law societies (except for those in the Northern Territory) have revised their standard land contracts to include the notification.

    Note: If you fail to provide a written notice penalties may apply.

    See also:

    What to include in a supplier notification

    If your purchaser

    • doesn't have a withholding obligation your notice must make it clear that 'no withholding is required'
    • has a withholding obligation, your notice must include:  
      • the name and ABN of all suppliers
      • GST branch number (if applicable)
      • the amount they must withhold (round down to the nearest dollar)
      • when they must pay it to us
      • GST-inclusive contract price (plus the GST inclusive market value of non-monetary consideration).

    If you don't supply the correct information, it may cause delays in the GST property credits being allocated into your GST property credit account.

    Find out about:

    The name and ABN of all suppliers

    The supplier is the entity required to report the property transaction on their BAS (the entity liable for the GST).

    If there are multiple suppliers and they are all required to report the property transaction on their BAS, then the name and ABN of each supplier needs to be provided to the purchaser.

    If you are:

    • part of a partnership, include the partnership name and ABN
    • a member of a GST group, one member of the group (the representative member) completes the BAS and accounts for GST on behalf of the whole group. The name and ABN of the representative member should be provided to the purchaser. Check if the ABN is registered for GST on the ABN lookup to ensure the credit will be allocated correctly.

    See also:

    Calculating the withholding amount

    The amount provided should be a whole dollar amount. Round cents down to the nearest dollar.

    Withholding amount

    The amount a purchaser must withhold and pay (rounded down to the nearest dollar) to us is generally either:

    • 1/11th of the contract price (for fully taxable supplies)
    • 7% of the contract price (for margin scheme supplies)
    • 10% of the GST exclusive market value of the supply (for supplies between associates for consideration less than GST-inclusive market value).

    The contract price may be varied by the parties before settlement. Normal settlement day adjustments can be disregarded (for example, adjustments to reflect apportionment of council rates or water rates).

    If the contract includes non-monetary consideration (for example, land swaps) the amount to be withheld needs to be calculated as a portion of the total monetary consideration (including GST) plus the GST inclusive market value of the non-monetary consideration.

    This is defined in GST law as the 'price for the supply'.

    See also:

    When the withholding is due

    The purchaser must make the withholding payment (rounded down to the nearest dollar) to us by the due date:

    • Under a standard land contract the due date of payment is on the day of settlement.
    • Under an instalment contract the due date of payment is on the day the first instalment is paid.

    If, however, your supply is to an associate for no consideration, your associate will be required to pay the withholding amount on the day on you make the supply.

    Information in the supplier notification changes

    If the required information changes before or after settlement, you must provide a new notice to the purchaser. The purchaser will need to contact us to organise the forms to be amended or cancelled.

    If the credit in the GST property credit account has been allocated to an incorrect supplier you need to submit a transfer request.

    See also:

      Last modified: 26 Mar 2020QC 56252