On 29 March 2018 amendments were made to the GST laws requiring purchasers of new residential premises or potential residential land to withhold an amount from the contract price and pay it to the ATO.
Currently some property developers are making taxable sales of these types of properties and are failing to remit the GST collected from purchasers to the ATO (e.g. by ‘phoenixing’).
The amended legislation includes a transitional arrangement that excludes contracts entered into before 1 July 2018 where any consideration for the supply (other than a deposit) is provided before 1 July 2020. This will provide certainty for contracts that have already been signed.
The measure applies from 1 July 2018.