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Schedule 5—Payment of GST on taxable supplies of certain real property

Schedule 5 Payment of GST on taxable supplies of certain real property

Part 1 Main amendments

Taxation Administration Act 1953

1  At the end of Division 14 in Schedule 1

Add:

Subdivision 14-E GST payable on taxable supplies of certain real property

Table of sections

14-250      Recipients of certain taxable supplies of real property must pay amounts to Commissioner

14-255      Notification by suppliers of residential premises etc.

14-250   Recipients of certain taxable supplies of real property must pay amounts to Commissioner

Liability to pay an amount

             (1)  You must pay to the Commissioner an amount if:

                     (a)  you are the recipient (within the meaning of the * GST Act) of a * taxable supply that is, or includes, a * supply to which subsection (2) applies; and

                     (b)  in a case where the supply is a supply of * potential residential land—either:

                              (i)  you are not registered (within the meaning of that Act); or

                             (ii)  you do not acquire the thing supplied for a * creditable purpose.

             (2)  This subsection applies to a * supply, by way of sale or long-term lease (within the meaning of the * GST Act), of:

                     (a)  * new residential premises that:

                              (i)  have not been created through * substantial renovations of a building; and

                             (ii)  are not * commercial residential premises; or

                     (b)  * potential residential land that:

                              (i)  is included in a * property subdivision plan; and

                             (ii)  does not contain any building that is in use for a commercial purpose;

other than a supply that is of a kind determined by the Commissioner under subsection (3).

             (3)  The Commissioner may, by legislative instrument, determine that subsection (2) does not apply to a kind of * supply specified in the determination.

When the amount must be paid

             (4)  You must pay the amount on or before:

                     (a)  the day on which:

                              (i)  any of the * consideration for the * supply (other than consideration provided as a deposit) is first provided; or

                             (ii)  if the supplier is your * associate, and the supply is without consideration—the supply is made; or

                     (b)  if a determination under subsection (5) applies—the day provided under that determination.

             (5)  The Commissioner may determine, by legislative instrument, circumstances in which amounts under this section are to be paid on or before the day provided under the determination. The determination may provide for amounts to be paid in instalments.

The amount to be paid

             (6)  The amount to be paid to the Commissioner is an amount equal to:

                     (a)  if the * margin scheme applies to the * supply:

                              (i)  the percentage, of the amount provided under subsection (7), determined by the Minister under subsection (8); or

                             (ii)  if there is no such determination—7% of the amount provided under subsection (7); or

                     (b)  otherwise— 1 / 11 of the amount provided under subsection (7).

             (7)  For the purposes of paragraphs (6)(a) and (b), the amount is:

                     (a)  if the contract for the * supply specifies an amount (the contract price ) that is the * price for the supply, subject to normal adjustments that apply on completion of transactions of that kind—that contract price; or

                     (b)  otherwise—the * price for the supply.

             (8)  The Minister may, by legislative instrument, determine a percentage exceeding 7%, but not exceeding 9%, for the purposes of subparagraph (6)(a)(i).

             (9)  Despite subsection (6), if:

                     (a)  the supplier is your * associate; and

                     (b)  the * supply is without * consideration or is for consideration that is less than the * GST inclusive market value;

the amount to be paid to the Commissioner is an amount equal to 10% of the * GST exclusive market value (within the meaning of the * GST Act) of the supply.

           (10)  Despite subsections (6) and (9), if:

                     (a)  the * supply does not consist solely of one or more supplies to which subsection (2) applies; and

                     (b)  it is practicable to ascertain, at the time any of the * consideration for the supply (other than consideration provided as a deposit) is first provided, the amount (the reduced amount ) of the amount provided under subsection (6) or (9) that relates to supplies to which subsection (2) applies;

the amount provided under subsection (6) or (9) is taken (other than for the purposes of this subsection) to be the reduced amount.

Multiple recipients

           (11)  If there is more than one recipient (within the meaning of the * GST Act) of the * supply (the original supply ):

                     (a)  treat each recipient as being the recipient of a separate supply; and

                     (b)  treat the amount under subsection (6), (9) or (10) (as the case requires) for such a separate supply as being the same proportion of that amount for the original supply, as the proportion of the original supply that is constituted by that separate supply.

Treat recipients who are joint tenants as a single recipient for the purposes of this subsection.

14-255   Notification by suppliers of residential premises etc.

             (1)  You must not make a * supply, by way of sale or long-term lease (within the meaning of the * GST Act), of * residential premises or of * potential residential land to another entity unless, before making the supply, you have given to the other entity a written notice stating:

                     (a)  whether the other entity will be required to make a payment under section 14-250 in relation to the supply; and

                     (b)  if the other entity will be required to make such a payment in relation to the supply:

                              (i)  your name and * ABN; and

                             (ii)  the amount that the other entity will be required to pay to the Commissioner under section 14-250 in relation to the supply; and

                            (iii)  when the other entity will be required to pay that amount; and

                            (iv)  if some or all of the * consideration for the supply will not be expressed as an amount of * money—the * GST inclusive market value of so much of the consideration as will not be expressed as an amount of money; and

                             (v)  such other matters as are specified in the regulations.

             (2)  However, subsection (1):

                     (a)  does not apply to a supply of * commercial residential premises; and

                     (b)  does not apply to a supply of * potential residential land to another entity if the other entity:

                              (i)  is registered (within the meaning of the * GST Act); and

                             (ii)  acquires the land for a * creditable purpose.

             (3)  To avoid doubt, a failure to comply with subsection (1) does not affect the other entity’s obligation to make a payment under section 14-250.

Strict liability offence

             (4)  You must not fail to give a notice required under this section.

Penalty:  100 penalty units.

             (5)  An offence against subsection (4) is a strict liability offence.

Note:          For strict liability, see section 6.1 of the Criminal Code.

Administrative penalty

             (6)  You are liable to pay the Commissioner a penalty of 100 penalty units if you fail to give a notice required under this section.

Note:          Division 298 contains machinery provisions for administrative penalties.

             (7)  However, you are not liable to a penalty for failing to meet the requirements of paragraph (1)(b) in relation to a supply if, at the time you gave the notice, you reasonably believed that you were not required to meet those requirements in relation to that supply.

2  At the end of section 16-30 in Schedule 1

Add:

             (2)  Subsection (1) does not apply in relation to a failure to pay an amount to the Commissioner as required by Subdivision 14-E if:

                     (a)  the amount relates to a * taxable supply of * new residential premises (other than * commercial residential premises); and

                     (b)  the entity was given a notice under section 14-255:

                              (i)  stating that the premises are not new residential premises; or

                             (ii)  indicating that the entity will not be required to pay an amount to the Commissioner under section 14-250 in relation to the supply; and

                     (c)  at the time * consideration for the supply (other than consideration provided as a deposit) is first provided, there was nothing in:

                              (i)  the contract for the supply; or

                             (ii)  any other circumstances relating to the supply;

                            that made it unreasonable for the entity to believe that the statement or indication was correct.

             (3)  Subsection (1) does not apply in relation to a failure to pay an amount to the Commissioner in relation to a * taxable supply as required by Subdivision 14-E if:

                     (a)  the entity required to pay the amount in relation to the supply gives the supplier a bank cheque on or before the day * consideration for the supply (other than consideration provided as a deposit) is first provided; and

                     (b)  the bank cheque is for the amount the entity is required to pay to the Commissioner, and is payable to the Commissioner.

3  At the end of Subdivision 18-A in Schedule 1

Add:

Entitlement to credit: taxable supply of real property

18-60   Credit—payment relating to taxable supply of real property

             (1)  An entity is entitled to a credit if:

                     (a)  the entity made a * taxable supply to which subsection 14-250(2) applies; and

                     (b)  another entity made a payment under section 14-250 in relation to the supply.

             (2)  The amount of the credit is an amount equal to the amount of the payment.

             (3)  The credit arises when an assessment has been made of the entity’s * net amount for the * tax period of the entity in which the payment was made.

4  At the end of Subdivision 18-B in Schedule 1

Add:

18-85   Refund by Commissioner of amount withheld from payment in respect of taxable supply of real property

             (1)  An entity (the recipient ) may apply, in the * approved form, to the Commissioner for the refund of an amount if:

                     (a)  another entity (the payer ) has made a payment under section 14-250, or purportedly under that section, in relation to a * taxable supply by the recipient; and

                     (b)  the payment, or part of the payment, was made in error.

             (2)  The application must be made no later than 14 days before the day on which * GST is payable on the supply.

             (3)  The amount of the refund that the recipient may apply for is an amount equal to the amount of the payment, or the part of the payment that was made in error, as the case requires.

             (4)  The Commissioner must refund the amount under subsection (3) if the Commissioner is satisfied that paragraphs (1)(a) and (b) apply and that it would be fair and reasonable to refund the amount, having regard to:

                     (a)  the circumstances that gave rise to the obligation (if any) to make the payment under section 14-250; and

                     (b)  the nature of the error; and

                     (c)  any other matter the Commissioner considers relevant.

Part 2 Other amendments

A New Tax System (Goods and Services Tax) Act 1999

5  At the end of section 33-1

Add:

Note 4:       For taxable supplies of new residential premises or potential residential land, section 14-250 in Schedule 1 to the Taxation Administration Act 1953 may require the recipient to pay to the Commissioner an amount representing the GST on the supply, and the supplier is then entitled to a credit for that payment under section 18-60 in that Schedule.

6  At the end of subsection 40-65(2)

Add:

Note:          For sales of residential premises that are new residential premises, the recipient of the supply must pay an amount representing the GST on the supply to the Commissioner under section 14-250 in Schedule 1 to the Taxation Administration Act 1953 , and the supplier is entitled to a credit for that payment under section 18-60 in that Schedule.

Income Tax Assessment Act 1997

7  Subsection 995-1(1) (paragraph (b) of the definition of amount required to be withheld )

Omit “or * capital proceeds”, substitute “, * capital proceeds or * taxable supply”.

8  Subsection 995-1(1) (paragraph (b) of the definition of amount withheld )

Omit “or * capital proceeds”, substitute “, * capital proceeds or * taxable supply”.

9  Subsection 995-1(1)

Insert:

commercial residential premises has the same meaning as in the * GST Act.

consideration , for a * taxable supply, has the same meaning as in the * GST Act.

margin scheme has the same meaning as in the * GST Act.

money , in relation to the * consideration for a * taxable supply, has the same meaning as in the * GST Act.

potential residential land has the same meaning as in the * GST Act.

price , for a * taxable supply, has the same meaning as in the * GST Act.

property subdivision plan has the same meaning as in the * GST Act.

substantial renovations has the same meaning as in the * GST Act.

10  Subsection 995-1(1) (paragraph (c) of the definition of withholding payment ) (first occurring)

Omit “or the * capital proceeds”, substitute “the * capital proceeds or a * taxable supply”.

11  Subsection 995-1(1) (at the end of the definition of withholding payment ) (second occurring)

Add:

               ; or (e)  the * taxable supply in respect of which Subdivision 14-E in that Schedule requires an amount to be paid to the Commissioner.

Taxation Administration Act 1953

12  Division 14 in Schedule 1 (heading)

Repeal the heading, substitute:

Division 14 Benefits, gains and taxable supplies for which amounts must be paid to the Commissioner

13  Paragraph 14-215(1)(d) in Schedule 1

After “withheld”, insert “(other than under Subdivision 14-E)”.

14  Subsection 16-25(2) in Schedule 1

Omit “Division 12A, 13 or 14”, substitute “Division 12A or 13 or Subdivision 14-A, 14-B, 14-C or 14-D”.

15  Paragraph 16-25(4)(b) in Schedule 1

Omit “Division 12A, 13 or 14”, substitute “Division 12A or 13 or Subdivision 14-A, 14-B, 14-C or 14-D”.

16  Section 16-30 in Schedule 1

Before “An entity”, insert “(1)”.

17  Subsection 16-70(3) in Schedule 1

Omit “or 14-D”, substitute “, 14-D or 14-E”.

18  Paragraph 16-140(1)(b) in Schedule 1

Omit “Division 14”, substitute “Subdivision 14-A, 14-B, 14-C or 14-D”.

19  Paragraph 16-140(2)(b) in Schedule 1

Omit “Division 12A, 13 or 14”, substitute “Division 12A or 13 or Subdivision 14-A, 14-B, 14-C or 14-D”.

20  Section 16-150 in Schedule 1

Before “An entity”, insert “(1)”.

21  Paragraph 16-150(b) in Schedule 1

Omit “Division 14”, substitute “Subdivision 14-A, 14-B, 14-C or 14-D”.

22  At the end of section 16-150 in Schedule 1

Add:

             (2)  An entity that must pay an amount (even if it is a nil amount) to the Commissioner under Subdivision 14-E (about payments in respect of taxable supplies of certain real property) must notify the Commissioner of the amount:

                     (a)  on or before the day provided in a determination under subsection (3); or

                     (b)  if there is no such determination—on or before the day on which the amount is due to be paid (regardless of whether it is paid).

The notification must be in the * approved form and lodged with the Commissioner.

             (3)  The Commissioner may, by legislative instrument, determine when the Commissioner must be notified for the purposes of paragraph (2)(a).

23  Subsection 18-10(1) in Schedule 1

Repeal the subsection, substitute:

             (1)  The rules set out in sections 18-15, 18-20 and 18-25 do not apply to an * amount withheld from a * withholding payment that is covered by:

                     (a)  Subdivision 12-F (Dividend, interest and royalty payments); or

                     (b)  Subdivision 12-FA (Departing Australia superannuation payments); or

                     (c)  Subdivision 12-FC (Seasonal Labour Mobility Program); or

                     (d)  section 12-320 (Mining payments); or

                     (e)  Subdivision 12-H (Distributions of withholding MIT income); or

                      (f)  Division 13 (Alienated personal services payments); or

                     (g)  Subdivision 14-E (GST payable on taxable supplies of certain real property).

24  Subparagraph 18-65(1)(a)(ii) in Schedule 1

Omit “Subdivision 14-D”, substitute “Subdivisions 14-D and 14-E”.

25  Paragraph 389-20(1)(a) in Schedule 1

Omit “section 16-150”, substitute “subsection 16-150(1)”.

Part 3 Application of amendments

26  General rule

The amendments made by this Schedule apply in relation to supplies for which any of the consideration (other than consideration provided as a deposit) is first provided on or after 1 July 2018, whether a contract for the supply was entered into before, on or after the commencement of this Schedule.

27  Existing contracts

Despite item 26, if a contract for a supply was entered into before 1 July 2018, the amendments made by this Schedule do not apply in relation to the supply if consideration for the supply (other than consideration provided as a deposit) is first provided before 1 July 2020.

28  Existing property development arrangements

If:

                     (a)  an arrangement entered into before 1 July 2018 between:

                              (i)  an entity (the supplier ) making a taxable supply that is, or includes, a supply to which subsection 14-250(2) in Schedule 1 to the Taxation Administration Act 1953 as amended by this Schedule applies; and

                             (ii)  one or more entities (not including the entity to which the supply is made), at least one of whom is supplying (or is to supply) development services in relation to the real property to which the supply relates;

                            deals with the distribution, between the parties to the arrangement, of the consideration for the supply; and

                     (b)  under the arrangement:

                              (i)  an amount is to be distributed to the supplier for the payment of the supplier’s liability to GST for the supply (less any relevant entitlements to input tax credits); or

                             (ii)  distributions of the consideration, between the parties, are to be adjusted to take into account that liability; and

                     (c)  were that amount to be distributed under the arrangement, or were the distributions to be so adjusted, the parties would not be in the same position as they would be if an amount were not payable, under section 14-250 in that Schedule as so amended, in relation to the supply; and

                     (d)  a payment has been made under that section in relation to the supply;

the amount of the payment is taken, for the purposes of the arrangement, to have been received by the supplier in relation to the supply.

(6/18)