New residential premises – purchasers to pay GST
The budget presented on 9th May proposed changes to the way GST is treated for newly constructed residential properties.
With effect from 1 July 2018, purchasers of newly constructed residential properties (or new subdivisions) will be required to remit the GST on the purchase price directly to the ATO as part of settlement (instead of the vendor/developer remitting the GST in its BAS).
CGT changes for foreign investors
The budget also outlined changes to the foreign resident capital gains tax regime.
With effect from 1 July 2017, there will be an increase in the CGT withholding rate for real property sales to foreign tax residents from 10.0% to 12.5%. There will also be a corresponding reduction in the CGT withholding threshold from $2M to $750,000 for foreign tax residents.
Foreign and temporary tax residents will also be denied access to the CGT main residence exemption from 7.30pm (AEST) on 9 May 2017 (with existing holdings being grandfathered until 30 June 2019).
Please contact our office if you wish to discuss either of these proposed changes in further detail.