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Topics on CGT and GST for property buyers (14)

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Under S.14-250 of Schedule 1, where a recipient of a taxable supply (i.e., a property buyer) has acquired property subject to GST withholding, they are required to withhold an amount from the purchase price. The GST withholding rules apply to the following taxable supplies: 
  • Supply of new residential premises that: 
  • have not been created through substantial renovations of a building; and 
  • are not commercial residential premises. 
  • Supply of potential residential land that: 
  • is included in a property subdivision plan; and 
  • does not contain any building that is in use for a commercial purpose; and 
  • is made to a buyer who is either not GST-registered, or does not acquire the land for a creditable purpose to any extent (e.g., where the buyer acquires the land purely for private purposes, or solely to construct a house to rent out). 

Meaning of ‘new residential premises’ 

Residential premises are generally regarded as ‘new residential premises’ (under S.40-75(1) of the GST Act) where they: 

  • have not previously been sold as residential premises (other than commercial residential premises) and have not previously been the subject of a long-term lease; 
  • have been created through substantial renovations of a building; or 
  • have been built, or contain a building that has been built, to replace demolished premises on the same land. 

 

Written by Panbo Ye

I help people discover POWERFUL unknowns in Tax Ideas | Wealth Strategies | Retirement Planning | Finance Solutions!

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