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Topics on CGT and GST for property buyers (18)

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Where a contract of sale is based on a standard land contract, a seller is taken to have provided a buyer with a supplier notification (in all States and the ACT), as standard land contracts in these jurisdictions have been revised to include the notification. 

In contrast, in the Northern Territory, a supplier notification is not automatically provided under a standard land contract. In these circumstances, the notification may be expressly included in the sale contract or in a separate document. 

A supplier notification assists a buyer (of residential premises or potential residential land) to comply with their GST withholding obligations by containing the following information: 

  • The supplier notification advises a buyer whether they have a GST withholding obligation. Where the buyer does not have a GST withholding obligation, the notice must make it clear that no withholding is required. 
  • Where a buyer has a GST withholding obligation, the supplier notification must include: 
  • the name and ABN of the seller (or of all sellers if there is more than one); 
  • the GST branch number (if applicable); 
  • the amount that must be withheld (rounded down to the nearest dollar); 
  • the due date for the GST withholding amount to be paid to the ATO; and 
  • the GST inclusive contract price (which includes the GST inclusive market value of non- monetary consideration provided by the buyer, where applicable). 

A buyer uses the information contained in a supplier notification to complete their reporting obligations (discussed further below), as well as to calculate the amount required to be withheld from the purchase price and paid to the ATO. 

Once the GST withholding amount has been paid, the seller receives a credit to their GST property credit account (which can be viewed via ATO online services for individuals and sole traders, ATO online services for agents or the Business Portal), along with an email confirming this has happened. The credit should not be reported by the seller in their BAS, but is, instead, automatically applied by the ATO against their net BAS liability. Any surplus credits are refunded by the ATO (subject to their normal GST refund processes). Refer to the ATO’s factsheet ‘GST at settlement – a guide for suppliers and their representatives’ (QC 56252). 

 

  • Should you have any queries, please contact Tax Ideas Accountants & Advisers on +61 2 83181545 
  • Alternatively, you can book an appointment in our live calendar 

 

 

Written by Panbo Ye

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

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