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New laws to clamp down on tax evasion in property development sector

New laws to clamp down on tax evasion in property development sector

The Turnbull government has passed legislation to clamp down on GST evasion in the property development sector.

From 1 July 2018, the tax law will require purchasers of new residential premises and new residential subdivisions to withhold the GST on the purchase price at settlement and pay it directly to the ATO.

Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP, said that the measure targets illegal phoenix activity in the property development sector.

“It puts an end to the problem of some developers collecting GST on new properties but then dissolving their business to avoid remitting the tax when it is owed to the ATO,” the minister said.

“The new arrangements will increase compliance with tax law, level the playing field for compliant businesses and secure GST revenue for the states and territories to provide essential services that Australians rely on.”

The minister said that this measure complements the government’s comprehensive package of reforms to combat illegal phoenix activity, including the government’s commitment to introduce a director identification number.

She said that the legislation also delivers on the government’s commitments to make regulatory improvements to treasury portfolio laws, extend tax relief for merging superannuation funds until 1 July 2020, provide ongoing funding to the SuperStream gateway network governance body, and transfer the regulator role for early release of superannuation benefits on compassionate grounds.

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New laws to clamp down on tax evasion in property development sector
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