Under S.14-250 of Schedule 1, where a recipient of a taxable supply (i.e., a property buyer) has acquired property subject to GST withholding, they are required to withhold an amount from the purchase price. The GST withholding rules apply to the following taxable supplies:
- Supply of new residential premises that:
- have not been created through substantial renovations of a building; and
- are not commercial residential premises.
- Supply of potential residential land that:
- is included in a property subdivision plan; and
- does not contain any building that is in use for a commercial purpose; and
- is made to a buyer who is either not GST-registered, or does not acquire the land for a creditable purpose to any extent (e.g., where the buyer acquires the land purely for private purposes, or solely to construct a house to rent out).
Meaning of ‘new residential premises’
Residential premises are generally regarded as ‘new residential premises’ (under S.40-75(1) of the GST Act) where they:
- have not previously been sold as residential premises (other than commercial residential premises) and have not previously been the subject of a long-term lease;
- have been created through substantial renovations of a building; or
- have been built, or contain a building that has been built, to replace demolished premises on the same land.