The Turnbull Government has successfully passed legislation to clamp down on GST evasion in the property development sector.
From 1 July 2018, the tax law will require purchasers of new residential premises and new residential subdivisions to withhold the GST on the purchase price at settlement and pay it directly to the Australian Taxation Office (ATO).
"This measure targets illegal phoenix activity in the property development sector. It puts an end to the problem of some developers collecting GST on new properties but then dissolving their business to avoid remitting the tax when it is owed to the ATO," the Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP said.
"The new arrangements will increase compliance with tax law, level the playing field for compliant businesses, and secure GST revenue for the states and territories to provide essential services that Australians rely on."
This measure complements the Government’s comprehensive package of reforms to combat illegal phoenix activity, including the Government’s commitment to introduce a Director Identification Number.
The legislation also delivers on the Government’s commitments to:
- make regulatory improvements to Treasury portfolio laws such as in superannuation and corporations law,
- extend tax relief for merging superannuation funds until 1 July 2020,
- provide ongoing funding to the SuperStream gateway network governance body, and
- transfer the regulator role for early release of superannuation benefits on compassionate grounds from the Department of Human Services to the ATO, cutting the administrative burden for superannuation trustees and helping applicants to receive their funds sooner.
The legislation and supporting materials are available on the Australian Parliament House website.