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.
Revenue Ruling No DUT 047 states that previously when the consideration related to a sale of land that was a taxable supply, the purchaser paid duty on the GST inclusive purchase price to the vendor (including any amounts paid on account of GST). The vendor then remitted the GST to the ATO.
Regardless of the new obligations on the part of the purchaser to withhold GST on behalf of the vendor, the rulings clarifies that duty is still payable on the GST component of the purchase price. This applies whether the purchaser pays the withheld GST amount directly to the ATO or to the vendor via bank cheque made out to the ATO.
If you have questions on any of the above issues raised, please do not hesitate to contact us.
Kim Edwards
Chartered Tax Adviser
Chartered Accountant
T: 02 9984 7774
E: kime@northadvisory.com.au
About the author
Marius Fourie - Director & Business Advisor
As Director and Business Advisor, Marius uses his accounting expertise and empathetic skills to work directly with business owners and help them feel at ease with their finances.
Marius saw a common need in clients that just wasn’t being met by accounting providers.
That need was for clear, open communication and streamlined accounting services that didn’t come padded out with any unnecessary features.
Business owners just don’t have time to compare different accounting firms to see which one has the best packages with the best inclusions (many of which they would pay for but never use).
Key Takeaways
GST does not replace duty — both taxes can apply to the same property transaction.
If selling a new residential property (or subdivided land) as a taxable supply with GST, you also pay state/territory duty on the price including GST.
Buyers and sellers need to budget for the full cost: price + GST + duty.
Because duty is calculated on the GST-inclusive amount, failing to account for this can lead to unexpected extra costs at settlement.
Contract wording may be misleading — “GST exclusive” price doesn’t shield you from duty if GST applies.
The legal obligation to pay duty depends on the supply being taxable, not on contract labels.
Driven by our values
Effortless and Seamless
On-Boarding Process
Intuitive and Knowledgeable
Direct Expert
Access
Useful and Articulate
Financial
Reporting
Forward
Thinking
Compliance Solutions
Streamlined
Tech
Integrated and Automated
Frequently Asked Questions
What changed on 1 July 2018 regarding GST and property sales?
From 1 July 2018, purchasers of new residential properties or subdivided residential land must withhold any applicable GST from the contract price at settlement and remit it to the tax authority (or via bank cheque made out to the Commissioner).
Does stamp duty (or transfer duty) still apply when GST applies on a property sale?
Yes — under the relevant state duties laws (for example in NSW), stamp duty is calculated on the full consideration, including the portion attributable to GST, when the supply is taxable.
Does it matter whether the purchaser pays the withheld GST to the tax office or to the vendor via cheque?
No — the duty liability remains unchanged. Duty is assessed on the total price inclusive of GST, regardless of how the GST is remitted at settlement.
Is the GST-inclusive price always the basis for duty, even if the contract “excludes GST”?
If the transaction is a taxable supply (e.g. a new residential property or subdivided residential land), duty will apply on the “consideration” — which includes the amount paid on account of GST — even if the contract wording or disclosure suggests otherwise.
Does this rule apply across all Australian states and for all types of property transactions?
While the principle comes from the NSW ruling (under the Duties Act 1997 (NSW)), the general approach to duty + GST applies broadly in jurisdictions that charge stamp/transfer duty: when GST is payable on a taxable supply, duty is calculated on the GST-inclusive amount.
Do I still have to pay stamp duty on a property sale even if GST applies?
Yes — I still have to pay duty (stamp duty) on a property sale even when GST is payable. GST and stamp duty are separate taxes: GST applies to the supply of the property, while duty is charged by the state/territory government on the transaction itself. Even if GST is involved, duty still remains payable under the relevant state or territory law.
North Advisory’s Reviews 
On 
Flo Mitchell
4 weeks ago
Changed to this company in 2019 from former accountant and love their approach of organizing everything for me face to face with Xero set up plus being able to call as much as I need for set annual fee. They also picked up on something that was not done correctly by my former accountant and saved me $4k for this.
Timothy Cummins
A month ago
They the truly the best, Martin and Judy are so experienced, knowledgeable & professonal, also quite like speaking with Rose : ) all people are so lovely!
Michael Iera
2 months ago
Positive, Responsiveness, Quality, Professionalism, Value
Michael Iera
2 months ago
Excellent company in regards to service and professionalism. Very experienced in dealing with complex matters. Highly recommended.
Reach out we are here to help
Recognising the uniqueness of each business, we specialise in customised accounting services crafted to meet your specific needs and drive business growth.
Don’t hesitate to contact us if you’re ready to streamline your financial management with tailored solutions. Your business’s success is our primary focus. Fill in the contact form or call us to book an initial 30-minute chat.
Suite 6, 11 Oaks Avenue
Dee Why, Northern Beaches
NSW 2099
Australia