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Edited version of private advice
Authorisation Number: 1051868797212
Date of advice: 16 July 2021
Ruling
Subject: GST at settlement
Question
Are you required to withhold an amount under section 14-250 of Schedule 1 to the Taxation Administration Act 1953 (TAA)?
Answer
No
The scheme commences on:
The date of issue
Relevant facts and circumstances
The vendor provided a written notification stating that there was no withholding required under section 14-250 of Schedule 1 to the TAA.
Relevant legislative provisions
Sub-section 14-250 (1) of schedule 1 to the Taxation Administration Act 1953
Sub-section 14-250 (2) of schedule 1 to the Taxation Administration Act 1953
Reasons for decision
Section 14-250 of Schedule 1 to the TAA - Recipients of certain taxable supplies of real property must make pay amounts to Commissioner:
Liability to pay an amount
(1) You must pay to the Commissioner an amount if:
(a) You are the recipient (within the meaning of the GST Act) of a taxable supply that is or includes a supply to which subsection (2) applies; and
(b) In a case where the supply is a supply of potential residential land - either:
(i) You are not registered (within the meaning of that Act); or
(ii) You do not acquire the thing supplied for a creditable purpose.
(2) This subsection applies to a supply by way of a sale or long-term lease (within the meaning of the GST Act), of:
(a) new residential premises that:
(i) Have not been created through substantial renovations of a building; and
(ii) Are not commercial residential premises; or
(b) potential residential land that:
(i) Is included in a property subdivision plan; and
(ii) Does not contain any building that is in use for a commercial purpose.
Therefore, based on the facts of this case the purchaser has no withholding requirements under section 14-250 of Schedule 1 to the TAA.