The Australian Taxation Office (ATO) is reminding conveyancers that goods and services tax (GST) at settlement may apply to vendors who sell new residential premises or potential residential land.
If vendors make $75,000 or more in a year from selling property, even if it’s from a one-off property transaction, they may need to register for GST.
If GST at settlement applies to a property sale, vendors need to notify the buyer before settlement occurs, state the amount to withhold and when to withhold. The buyer withholds the GST amount from the contract price to pay it to the ATO when settlement occurs.
Vendors need to report their property sales at label G1, and GST on these sales at label 1A on their Business Activity Statement (BAS) in the period that settlement occurs.
If vendors need more information on their GST obligations, they can speak to a registered tax or BAS agent.
Visit www.ato.gov.au/gstatsettlement, or watch this video on the ATO website, to learn more.
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