How to complete the new GST Withholding section in REIQ Contracts?
As discussed in our previous Article “Buyer Alert! New GST Withholding Laws for Buyers and Developers of New Residential Property” new GST withholding rules came into force on 1 July 2018. The Real Estate Institution Queensland (REIQ) Contract has been updated to reflect these changes and a new section titled “GST WITHHOLDING OBLIGATIONS” has been included.
GST Withholding & REIQ Contracts
Under the new GST withholding section of REIQ contracts, the Buyer must state whether they are “…registered for GST and acquiring the land for a creditable purpose.” The Seller will then rely on this statement to determine whether GST is required to be withheld at settlement. The Seller must notify the Buyer whether or not they are required to withhold GST. The requirement to provide notification applies to the sale of all residential premises and potential residential land with the exception of certain transactions.
After receiving notification from the Seller the Buyer is required to lodge property settlement forms with the Australian Taxation Office (ATO) before settlement occurs and provide the Seller with confirmation from the ATO that all required forms have been lodged.
There are potential financial penalties that may apply for failing to comply with the new withholding rules. If you are not sure how to complete this section or if this applies to you, contact Aylward Game Solicitors today.