GST treatment of new residential premises
The Government has recently introduced legislative amendments into Parliament which aim to clarify the GST treatment of new residential premises. Broadly, the proposed amendments to the GST law aim to ensure that sales or long-term leases of new residential premises by a registered entity are "taxable supplies", and that sales or long-term leases of other residential premises are "input taxed supplies". The amendments follow a court decision which had held that a developer's sales of newly constructed residential premises (constructed under a "development lease" arrangement) were input taxed supplies under the GST law. The Government said the outcome of the case was contrary to the policy intent of the GST legislation.
The ATO has identified common GST errors concerning property transactions. Mistakes can often be made in working out when new residential premises are actually "new" and therefore taxable. Please contact our office if you have any questions.
