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Tax Briefing Standby for July

  • May 31, 2018

Tax Briefing: Standby for July

The Property Council’s Tax Briefing: Standby for July held on Wednesday 23 May, provided an insight into the tax changes that the industry will need to understand from 1 July.

Hosted by Grant Thornton, the event featured a knowledgeable speaker line up and a fantastic audience driven, panel discussion.

Sian Sinclair, Global Industry Leader – Real Estate and Construction for Grant Thornton, provided an informative overview that covered the breadth of tax changes due to commence 1 July. These include the Queensland Government’s proposed land tax increase for aggregated landholdings over $10 million, and the increase to the Additional Foreign Acquirer Duty (AFAD) from 3% to 7%. The Property Council is continuing to highlight our significant concerns with these tax increases in the lead up to the State Budget.

Tony Windle, Partner and National Head of Indirect Tax for Grant Thornton, provided an overview of the GST at settlement changes, due to take effect July 1. Shortly after, James Francis, Director in GST Technical Product Leadership for the Australian Taxation Office, discussed the application process and new requirements.

Under the new process, the GST payment responsibility has shifted from property developers to property purchasers.

This will apply to all relevant contracts executed after 1 July 2018, and triggers a GST withholding obligation of 1/11th of the total purchase price for taxable sales, or 7% of the contract price for margin scheme sales.

Steven Fogarty, Technical Adviser in the Australian Taxation Office Tax Counsel Network, joined our speakers for a panel discussion, moderated by Sian Sinclair.

All three speakers stressed the importance of understanding that under the new legislation, the purchaser is expected to withhold and pay the GST. Tony explained, it is essential for property developers to notify the purchaser in writing at least 14 days before settlement.

Steven added, “lawyers have a really important part in this. We need to make sure people are aware.”

The Property Council would like to thank Sian, Tony, James and Steven for their informative discussion and Grant Thornton for hosting.

For more information on the GST Withholding Regime, visit: Draft Law Companion Ruling LCR 2018/D1, Tax InVoice, GST withholding for certain taxable sales of property, GST at settlement, GST and property.