From 1 July 2018, most purchasers of either:
- new residential premises
- land that could be used to build new residential property ('potential residential land')
will be required to pay a withholding amount from the contract price at the date of settlement. This is paid directly to the ATO rather than to the property supplier.
If you are selling residential premises or potential residential land you must:
- notify the purchaser in writing (supplier notification)
- advise whether they need to pay a withholding amount – or not – from the contract price for the property
- state the withholding amount.
This can be included in the sales contract or in a separate document, prior to settlement. Most states have updated their standard contracts to include this information.
If you realise you made a mistake on the notification, you have an obligation to provide the purchaser an amended one.
You may incur penalties if you fail to provide the required notice.
The purchaser pays the withholding amount directly to the ATO at the time of settlement – instead of to you.
If you are purchasing a property ensure you have a written notification advising if you have a withholding obligation on the property or not.
If you have a withholding obligation, you must:
- ensure you have a written notification from the supplier stating if the sale is subject to GST
- lodge Form one: GST property settlement withholding notification
- lodge Form two: GST property settlement date confirmation
- pay the withheld amount to us.
You don't need to register for GST just because you have a withholding obligation.
If you're unsure or require further advice regarding the information provided in the supplier's notification, you should seek advice from us or your tax professional.
You may incur penalties if you fail to lodge the forms and make the payment to us.
We won’t impose penalties when it's reasonable for you to rely on a notification from a supplier. However, if you know a supplier is registered for GST and they’re selling new residential premises not previously sold it's unreasonable not to withhold and pay an amount to us at settlement.
Using a representative
If you authorise a representative to lodge the forms on your behalf, you are required to provide them with a signed declaration.
Note: Conveyancers aren't able to provide GST advice unless they're a registered tax or BAS agent.
Information in English:
- GST at settlement
- GST property settlement online forms and instructions
- GST at settlement – a guide for purchasers and their representatives
- GST at settlement – a guide for suppliers and their representatives
- Foreign investment – Residential investment