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Topics on CGT and GST for property buyers (14)

Written by Ideas Group | Mar 5, 2021 4:39:43 AM

 


Understanding GST Withholding Rules for Property Buyers

Under Section 14-250 of Schedule 1, buyers of properties subject to GST withholding must withhold an amount from the purchase price. Here's a breakdown of when GST withholding rules apply:

1. Supply of New Residential Premises: These are premises that:

  • Haven't undergone significant renovations.
  • Aren't classified as commercial residential premises.

2. Supply of Potential Residential Land: This applies to land that:

  • Is part of a property subdivision plan.
  • Doesn't have any buildings used for commercial purposes.
  • Is purchased by a buyer who isn't GST-registered or isn't acquiring the land for a creditable purpose (e.g., for private use or to build a rental property).

Defining "New Residential Premises": According to Section 40-75(1) of the GST Act, residential premises are considered "new" if they:

  • Haven't been sold previously as residential premises (except for commercial ones) or leased long-term.
  • Have been created through significant renovations.
  • Are newly built or replace demolished premises on the same land.

Need Assistance?

If you have any questions or need guidance on GST withholding rules, reach out to Tax Ideas Accountants & Advisers at +61 2 83181545, or book an appointment through our online calendar.

 
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