GST Withilding Tax Special Condition

hi, all seeking your help and I understand this will be not a legal advice or whatsoever.

Just want to know if you have any idea about Subdividion 14-E Schedule 1 Tax Admin Act 1953?

Any input will be gratefully appreciated if not I completely understand. Manny thx

 

That is about GST payable on taxable supplies of certain real property

TAXATION ADMINISTRATION ACT 1953 - SCHEDULE 1 Collection and recovery of income tax and other liabilities

 

Applies to contracts from 1 July 2018.

Seller must give notice to the buyer whether they have to withhold GST at settlement.

GST must be withheld for the sale of new residential premises and the sale of ‘potential residential land’. Note that last part is very broad and captures a lot more than you would think.

Amount to be withheld is 1/11th of the purchase price unless the margin scheme is being applied, in which case it is 7%.

Buyers lawyer has to lodge two forms with the ATO.

Expect a special condition saying the seller will collect the cheque to the ATO at settlement.

There is also an exception where the buyer is registered for GST and acquiring for a creditable purpose (ie builder or developer).

 

Thank you very much @Terry_w and @JDM for your input. If I may please ask, so if I am a purchaser and just an ordinary person (not a company, etc how does this special condition will effect? Greatly appreciated.

 

You haven't given the special condition but your status as an ordinary person probably doesn't change anything.

 

As long as you have a lawyer doing your conveyance, it won’t impact you in any meaningful way as a buyer. It just means the seller gets less money at settlement and the ATO gets a cheque for GST.