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  • Transitional arrangements end 30 June 2020

    The GST at settlement transitional arrangements end on 30 June 2020.

    From 1 July 2020 contracts entered into before 1 July 2018 for new residential premises or potential residential land may be subject to the withholding obligations under GST at settlement.

    When lodging Form one (GST property settlement withholding notification) for a property with a contract that was entered into before 1 July 2018 and settles after 30 June 2020, complete Form one with a Contract date of 1 July 2018 to allow the form to be lodged.

    Example: End of transition period

    On 11 May 2018, Rachael entered into a contract to purchase a new home unit from developer Watson Home Co for a contract price of $650,000. Rachael pays a 10% deposit of $65,000.

    As the supplier of the property, Watson Home Co needs to notify Rachael that she has to withhold $59,090 (1/11th of $650,000) and pay it to the ATO at settlement.

    Rachael is required to complete and lodge the two online forms to the ATO. Even though she entered into the contract earlier, she enters 1 July 2018 on Form one to allow it to be lodged.

    Rachael’s property is finished and the settlement date is 2 July 2020.

    At settlement, on 2 July 2020, Rachael must withhold and pay $59,090 to the ATO and pay Watson Home Co the balance of the contract price (being $525,910).

    End of example

    The GST at settlement process doesn't apply to contracts entered into before 1 July 2018 where any payment or consideration for the supply (other than a deposit) is provided before 1 July 2020 (that is, settlement occurs before 1 July 2020).

    See also:

    • LCR 2018/4 Purchaser's obligation to pay an amount for GST on taxable supplies of certain real property

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      Last modified: 22 Oct 2020QC 55431