Legislation has been passed to “clamp down” on GST evasion in the property development sector.
From 1 July 2018, purchasers of new residential premises and new residential subdivisions will generally be required to withhold the GST on the purchase price at settlement and pay it directly to the ATO.
Property developers will also need to give written notification to purchasers regarding whether or not they need to withhold.
The new obligations are primarily aimed at ending the practice of some developers collecting GST on new properties before dissolving their business prior to remitting such tax to the ATO.
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