11 May 2011
The government expects to reap an extra $60 million by amending the goods and services tax (GST) law “to protect the GST revenue base and to ensure the law applies appropriately to supplies of new residential premises”.
The Federal Government says this measure restores the policy intent of the law following arecent Federal Court decision which found that the sale by developers of certain newly constructed residential premises to owner‘occupiers and investors was input taxed rather than taxable.
The government’s change ensures that GST applies to the value added to real property by developers constructing new residential premises. The amendments will ensure that:
- from 3 October 2007, new residential premises constructed under development lease arrangements are treated as taxable supplies;
- from 1 July 2000, the granting of individual strata lot leases over newly constructed residential premises is not sufficient by itself to make future supplies of the premises input taxed; and
- from 1 July 2000, any change in property title arrangements will not result in the premises once again becoming new residential premises.
Transitional arrangements will apply to ensure that taxpayers who entered into arrangements on a basis consistent with the Court’s findings, prior to the Government’s announcement of its intent to undertake this reform (on 27 January 2011) are not disadvantaged.
