From July 1 – You have to pay GST direct to the ATO. The purchaser has always paid the GST – and the developer would move that money on to the ATO. That has now changed, and its now your responsibility.
Here are some tips
1. This should NOT change the purchase price
2. Your lawyer may charge you more – it will effect the settlement day (although its just with-holding the GST – and paying direct to ATO)
3. Vendors will be required to give buyers written notice of the ATO requirement, the vendors ABN, the amount to be paid and the payment date.
Penalties will apply if the details are not provided. DO NOT TRUST a developer that wishes to retain GST post 1 July.
If a purchaser does not withhold and pay the GST liability to the ATO a penalty equal to the amount of the GST with apply, that 11% of the price, which is a considerable sum.