GST Changes Start 1 July

Posted on 29/06/2018  
GST Changes Start 1 July

Changes in the property market starting on July 1 will include new ways that GST is paid on new houses.  

From July 1, buyers of new houses, units or residential land blocks effectively become tax collectors for the government, that is, they become responsible for paying the GST element of their deal direct to ATO.

Shoddy developers who “phoenix” have caused the change, according to the Property Council of Australia — “phoenixing” is when a person starts a new company doing the same business after deliberately liquidating another company to avoid paying its debts including taxes.

Property Council chief executive Ken Morrison said “under this change, buyers of new residential properties or subdivision of potential residential land will be responsible for remitting the GST amount to the ATO on or before settlement”.

“Previously, this was done by the developer. The overwhelming majority did the right thing and passed the GST they collected through to the ATO, but this measure has been introduced to deal with the minority who didn’t through so-called ‘phoenixing’,” he said.

This change is best discussed with a solicitor or settlement agent, and the federal government has a contingency plan for people who bought their new property before July 1 but will settle after it.

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