Duty remains payable on GST for property sale

Following new GST obligations on certain property purchases which took effect from 1 July 2018, Revenue NSW has clarified that duty continues to be payable on the GST component of such a sale.

From 1 July 2018, purchasers of new residential property and subdivisions of potential residential land are obliged to withhold GST from the contract price and pay this to the ATO on behalf of the vendor. This change was enacted by Sch 5 to Treasury Laws Amendment (2018 Measures No 1) Act 2018. The GST component is to be remitted to the ATO, or the withheld amount paid to the vendor via a bank cheque made out to the Commissioner of Taxation, on or before settlement.

Under the Duties Act 1997 (NSW), if the consideration relates to a taxable supply that is subject to GST, duty will be payable on the total consideration, including any amount paid on account of GST, regardless of how the consideration is expressed for GST purposes.