{"id":5314,"date":"2020-11-10T13:19:40","date_gmt":"2020-11-10T02:19:40","guid":{"rendered":"https:\/\/mnygroup.wpengine.com\/?p=5314"},"modified":"2025-02-01T17:26:47","modified_gmt":"2025-02-01T06:26:47","slug":"hide-unexpected-gst","status":"publish","type":"post","link":"https:\/\/mnygroup.com.au\/en\/hide-unexpected-gst\/","title":{"rendered":"The Investment Option That Can Hide Unexpected GST"},"content":{"rendered":"<p><span style=\"color: #000000;\"><nav aria-label=\"breadcrumbs\" class=\"rank-math-breadcrumb\"><p><span class=\"last\">Home<\/span><\/p><\/nav><\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-large wp-image-5315 aligncenter\" src=\"https:\/\/mnygroup.com.au\/wp-content\/uploads\/2021\/01\/The-Investment-Option-That-Can-Hide-Unexpected-GST-1024x390.png\" alt=\"The Investment Option That Can Hide Unexpected GST\" width=\"1020\" height=\"388\" srcset=\"https:\/\/mnygroup.com.au\/wp-content\/uploads\/2021\/01\/The-Investment-Option-That-Can-Hide-Unexpected-GST-1024x390.png 1024w, https:\/\/mnygroup.com.au\/wp-content\/uploads\/2021\/01\/The-Investment-Option-That-Can-Hide-Unexpected-GST-300x114.png 300w, https:\/\/mnygroup.com.au\/wp-content\/uploads\/2021\/01\/The-Investment-Option-That-Can-Hide-Unexpected-GST-768x292.png 768w, https:\/\/mnygroup.com.au\/wp-content\/uploads\/2021\/01\/The-Investment-Option-That-Can-Hide-Unexpected-GST-1536x585.png 1536w, https:\/\/mnygroup.com.au\/wp-content\/uploads\/2021\/01\/The-Investment-Option-That-Can-Hide-Unexpected-GST.png 1972w\" sizes=\"auto, (max-width: 1020px) 100vw, 1020px\" \/><\/p>\n<blockquote><p>New residential property is a popular investment for many, and can be especially so for self-managed superannuation funds, however the ATO is concerned that not every investor in residential property is fully aware that it is an option that may bring with it unexpected GST obligations.<\/p><\/blockquote>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #000000; font-size: 120%;\">The ATO says that from 1 July 2018, most purchasers must withhold an amount from the contract price at the date of settlement and pay it directly to the ATO. The sale price is paid to the property supplier. This applies to:<\/span><\/p>\n<ul>\n<li><span style=\"color: #000000; font-size: 120%;\">new residential premises<\/span><\/li>\n<li><span style=\"color: #000000; font-size: 120%;\">land that could be used to build new residential property (\u201cpotential residential land\u201d).<\/span><\/li>\n<\/ul>\n<p><span style=\"color: #000000; font-size: 120%;\">Purchasers who engage a representative when buying new residential property will need to complete a signed declaration so the representative can lodge two required forms and pay GST on behalf of the purchaser.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 120%;\">Purchasers who have a GST withholding obligation must complete and lodge two forms:<\/span><\/p>\n<ul>\n<li><span style=\"color: #000000; font-size: 120%;\">when they sign the contract, lodge Form one: <em>GST property settlement withholding notification<\/em> using information from the supplier notification (see below)<\/span><\/li>\n<li><span style=\"color: #000000; font-size: 120%;\">when the property settles<\/span>\n<ul>\n<li><span style=\"color: #000000; font-size: 120%;\">lodge Form two: <em>GST property settlement date confirmation<\/em>, and<\/span><\/li>\n<li><span style=\"color: #000000; font-size: 120%;\">pay the GST withheld amount.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"color: #000000; font-size: 120%;\">Ask us if you require these forms.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 120%;\">If there were any mistakes on Form two, the ATO should be contacted to have it cancelled before lodging a new form. If multiple properties are bought, lodging a new form for each property transaction will be required.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><a href=\"https:\/\/www.ato.gov.au\/Business\/GST\/In-detail\/Your-industry\/Property\/GST-at-settlement---a-guide-for-suppliers-and-their-representatives\/?page=3\" target=\"_blank\" rel=\"noopener\"><span style=\"color: #000000; font-size: 120%;\">SUPPLIER NOTIFICATION<\/span><\/a><\/h2>\n<p><span style=\"color: #000000; font-size: 120%;\">To complete Form one, the supplier (seller\/vendor) needs to give the buyer a \u201csupplier notification\u201d so the purchaser knows whether or not there is a GST withholding obligation.<\/span><\/p>\n<p><strong><span style=\"color: #000000; font-size: 120%;\">If there\u2019s an obligation to withhold GST, the supplier notification must include:<\/span><\/strong><\/p>\n<ul>\n<li><span style=\"color: #000000; font-size: 120%;\">the name and ABN of all suppliers<\/span><\/li>\n<li><span style=\"color: #000000; font-size: 120%;\">GST branch number (if applicable)<\/span><\/li>\n<li><span style=\"color: #000000; font-size: 120%;\">the amount of GST to be withheld (rounded down to the nearest dollar)<\/span><\/li>\n<li><span style=\"color: #000000; font-size: 120%;\">when the GST must be paid<\/span><\/li>\n<li><span style=\"color: #000000; font-size: 120%;\">GST-inclusive contract price (plus the GST inclusive market value of non-monetary considerations).<\/span><\/li>\n<\/ul>\n<p><strong><span style=\"color: #000000; font-size: 120%;\">A supplier\u2019s written notice can be relied on:<\/span><\/strong><\/p>\n<ul>\n<li><span style=\"color: #000000; font-size: 120%;\">when it states a purchaser isn\u2019t required to pay an amount to the ATO. In most states and territories the standard contract of sale clearly states if a purchaser is required to withhold GST or not <\/span><\/li>\n<li><span style=\"color: #000000; font-size: 120%;\">if the purchaser is unaware of an error on the notice and the supplier doesn\u2019t tell them.<\/span><\/li>\n<\/ul>\n<p><span style=\"color: #000000; font-size: 120%;\">However, if the purchaser or their representative knows that a supplier is registered for GST and selling new residential premises, the ATO considers it unreasonable not to withhold and pay an amount to it at settlement.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 120%;\">The ATO has stated that it won\u2019t retrospectively penalise purchasers who acted reasonably if it\u2019s later found that a supplier hasn\u2019t met their obligations.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><strong><span style=\"color: #000000;\">Related Links:<\/span><\/strong><\/p>\n<p><em><a href=\"https:\/\/www.ato.gov.au\/business\/gst\/in-detail\/your-industry\/property\/gst-at-settlement\/\" target=\"_blank\" rel=\"noopener\">GST at settlement<\/a><\/em><\/p>\n<p><em><a href=\"https:\/\/www.ato.gov.au\/Business\/GST\/In-detail\/Your-industry\/Property\/GST-at-settlement---a-guide-for-suppliers-and-their-representatives\/?page=3\" target=\"_blank\" rel=\"noopener\">Supplier notification<\/a><\/em><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: center;\"><strong><a href=\"https:\/\/mnygroup.com.au\/\">www.mnygroup.com<\/a><\/strong><\/p>\n<p><span style=\"color: #999999;\"><em>This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs.<\/em><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>ATO is concerned that not every investor in residential property is fully aware that it is an option that may bring with it unexpected GST obligations.<\/p>\n","protected":false},"author":2,"featured_media":5315,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1689],"tags":[1457],"class_list":["post-5314","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting-advice","tag-gst","masonry-post","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-20"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/posts\/5314","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/comments?post=5314"}],"version-history":[{"count":0,"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/posts\/5314\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/media\/5315"}],"wp:attachment":[{"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/media?parent=5314"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/categories?post=5314"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/tags?post=5314"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}