In 16 days, the major tax system reform for Australian property development-the GST reform of the goods and services tax-is about to take effect.
Does this have anything to do with me?
Whether you are a developer or a buyer, if you want to purchase, long-term lease, the development of one of the following, it has a lot to do with you! This article gives you a detailed explanation of the real estate development of the goods and services tax (GST) reform.
GST reform, which involves the following two types of property:
1, new civilian dwellings (commercial buildings and those that have been substantially retrofitted) o
2, residential land resulting from division
Time: from 1 July 2018
Affected population: purchase of new residential property or newly allocated residential land
Change: buyers need to pay the goods and services tax (GST) directly to the Australian Inland Revenue Authority, not as part of the housing payment, to the developer.
"Why did the government introduce this new policy? Sounds like you need to buy a house and deal with ATO? When you sign a contract, you have to think about paying taxes right away? Does that mean you have to spend more money on a house?
First of all, let`s talk about the past and present life of this reform.
The Australian real estate market has been hot in recent years and is known to everyone on the planet. Many property developers are happy. According to the tax law, after the house purchaser collects all the purchase money from the purchaser, the GST part should be paid to the tax bureau within the specified time.
However, some developers do not choose to do so, various arrears, various reasons, even through bankruptcy liquidation way not to pay or underpay this part of the GST tax.
This is not a small amount. Naturally, the IRS will find a way to fill the hole, and the best thing to do is to fill it from the source. Then naturally, directly to the buyers of the house.
Don`t worry, as buyers, the total price of the property is the same. In the past, all the housing funds were given to developers at one time, the new regulations, the GST part of the direct payment to the tax bureau!
The specific operation shall be divided between the buyer and the seller:
1, for buyers (buyers)
If the property you purchase is affected by the new regulations in force on July 1, 2018, you will need to pay 1 / 11 of the whole house directly to ATO. at the time of transfer In accordance with the law, the seller will provide you with an official written document indicating all relevant details.
But the new deal does not apply, as long as the contract is signed before July 1, 2018, and the first payment other than the deposit takes place before July 1, 2020, and will not be affected.
For example, on May 15, 2018, Mr. Li, a real estate agent, signed a contract to sell the house to Ms. Wang. Ms. Wang paid a deposit of 10% according to the date of signing the contract. Other payments will be settled at the closing date of August 15, 2018.
2, for seller (developer)
Developers can no longer collect the full purchase of the house, but formally notify the buyer in writing of the relevant details of GST`s payment to the Inland Revenue Authority.
In general, written notifications need to contain the following information:
Developer business registration information, including name, business code, etc.
Amount and time of payment of tax
If some or all of the house money is not shown by a specific numerical amount (for example, when paid in cash at the time of sale plus a combination of other assets), the quantized current market price (including GST) of the assets (which do not have a specific amount) needs to be given
In case of non-compliance, you will face a fine of up to $21000 per order, in addition to paying back taxes and interest!
Australia government has a close eye on the real estate industry, this article leads the jade, I hope you can pay attention to the new policy development, a step ahead!
