Getting your GST at settlement right

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The ATO has seen a number of common errors made on forms submitted by property purchasers since changes were made to the way GST is collected at settlement in July 2018.

Supplier details:
Errors are often a result of incorrect supplier notifications. Those that supply residential premises or potential residential land may be required to notify purchasers in writing whether they have a withholding obligation or not.

Suppliers are the entity that is liable to pay the GST on the supply of property. It is important to recognise that the supplier can also be someone other than the vendor named on the contract of sale. The notification of supplier details can be found in the sale contract or within a separate notification.

If the supplier is a member of a GST group, a partnership or a trust, they must provide purchasers with the ABN and the name that is liable to pay the GST. Check that the supplier details that are provided are correct as this will prevent processing delays in receiving your property credit as a purchaser.

Property settlement forms:
In the case of a withholding obligation, those purchasing new residential premises or potential residential land are required to submit both of the two online notification forms:

  1. GST property settlement withholding notification.
    This form covers various areas including contact details, property details, purchaser details, supplier details and an overall summary. The form can be submitted any time after you have entered into the contract and before the date of the withholding obligation is due.
  2. GST property settlement date confirmation.
    This form requires you to confirm that the settlement has occurred by answering the following questions:
  • Have you completed the GST property settlement withholding notification form?
  • Are you submitting the form as a purchaser or as a representative for the purchaser?
  • Have the purchaser and/or supplier details changed since the GST withholding notification form was lodged?

It can be submitted at the due date of the withholding obligation. In most instances, this will be at settlement or the next business day.

It is necessary to understand your obligations as a property purchaser. Filling out these forms incorrectly can cause processing and payment delays and failing to submit on time may also result in penalties being imposed by the ATO.

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