If your income producing activities include selling property and you make $75,000 or more in a year from selling property, even if it’s from a one-off property transaction, you may need to register for GST.
Once you’ve registered, GST at settlement may apply when you sell new residential premises or potential residential land.
If GST at settlement applies to the sale of your property, you need to notify the buyer before settlement occurs, state the amount they need to withhold and when to withhold.
The buyer then needs to withhold the GST amount from the contract price to pay it to the ATO when settlement occurs.
Remember to report your property sales at label G1, and GST on these sales at label 1A on your Business activity statement (BAS) in the period that settlement occurs.
You’ll receive a credit for the GST amount paid by the buyer in your GST account.
The GST credit for the sale will move into your BAS account and offset against any GST you owe after your BAS has been lodged.
You can view your GST property credits online through Online services for business or Online services for individuals and sole traders.
Remember, our tax team can help, get in touch today!
Visit the ATO’s website for more information on GST at settlement.
Source: ATO Newsroom