AGENTS- WHY SHOULD YOU REFER YOUR BUYERS AND SELLERS TO US? FIND OUT HERE
The Queensland Government has passed a Bill in an attempt to tackle phoenixing; a practice whereby property developers wind up their companies prior to their next business activity statement (“BAS”), thus avoiding payment of GST on property sales.
From July 1 2018, purchasers of lots in off the plan developments will be required to withhold one eleventh of the sale price from the vendor and remit this directly to the ATO (or 7% if the margin scheme is used). The remittance must occur on or before the date of settlement.
Developers selling the land will be required to give written notice to the buyer of this requirement prior to each sale contract, or else face administrative penalties of up to$105,000.
Developers who prefer instalment contracts (sale contracts where the purchase price is paid progressively through instalments) may need to consider how they structure their transactions, as the withheld amount may greatly reduce the first instalment, directly affecting the developer’s cash flow for the project.
As always, please feel free to contact us if you or your clients have any questions.