If you are purchasing a new residential premises or a residential land subdivision you (or your Conveyancer) will have to pay the GST directly to the tax office as part of the settlement.

These changes will apply to contracts entered into on or after 1 July 2018.

Property developers will need to give written notification to you when you need to withhold an amount for GST.

There are no changes to the sales of existing residential properties or the sales of new or existing commercial properties.

It is very important if you are purchasing a property where this new procedure applies that you are clear on what the purchase price is including any GST you are liable for. For example, many businesses you may deal with may provide a quote and then when the bill is received it is a surprise that the total cost is the quote PLUS GST.

Make sure that the end price that you have agreed upon is the price that is clearly documented in the contract, and that price includes the GST component.

Further information can be found at the  ATO Website.

If you are in doubt have a Conveyancer ready the Contract for Sale – BEFORE YOU SIGN IT!