GST Treatment of New Residential Premises
Previously announced changes to the application of GST to newly constructed residential premises will not apply prior to 27 January 2011, Assistant Treasurer Bill Shorten announced today.
The Assistant Treasurer released exposure draft legislation to ensure GST is payable on the full value added to newly constructed residential premises by developers.
The Assistant Treasurer confirmed that the legislation would not apply to sales of residential premises constructed under eligible arrangements entered into prior to 27 January 2011.
An eligible arrangement being an arrangement or agreement that is enforceable by legal proceedings.
The measure also will not apply to supplies of residential premises made on or after 27 January 2011 if the supply is because of a property subdivision plan lodged before that date.
The amendments will ensure that the sale of newly constructed residential premises to home buyers and investors is subject to GST even though there may have been an earlier 'wholesale supply' of the premises.
"The measure contained in the draft legislation will ensure GST applies as intended to sales of new residential premises to home buyers and investors by builders and developers," Mr Shorten said.
"I encourage interested parties to provide feedback on the proposed legislation and explanatory memorandum," said Mr Shorten.
The draft legislation and explanatory memorandum are available at www.treasury.gov.au and consultation will close on 21 October 2011.
23 September 2011