Recent legislative changes to the payment of Goods and Services Tax (GST) mean that property purchasers, rather than developers, will have to pay GST on new residential premises or potential residential land.
Aimed at decreasing the $1.8 billion debt in GST payments owed to the Federal Government, the new legislation, implemented last month, was also created to put a stop to “phoenixing,” a process wherein a company declares insolvency, but goes back to business under a new name, evading payment of debts and taxes.
In response to this new GST ruling, Property Exchange Australia (PEXA) recently improved its e-Conveyancing platform to improve member convenience. The goal was to streamline the management of GST payments, as well as providing greater transparency for all parties involved in property settlements.
“We continue to help our members adapt to this change with information and training programmes. Through PEXA, we have the clarity we don’t get in the paper-based world that the GST for relevant properties had been captured. I see this as a best practice for the industry that is both fast and efficient,” Australian Institute of Conveyancers (AIC) National President Shane Jacob said.
Estimated to effect 70,000 property transactions a year, this new directive was one of the few major alterations to the GST’s transactions that has been made over the last 20 years, according to Property Council of Australia Chief Executive Ken Morrison.