ATO publishes Administrative Treatment of amendments to GST Act re new residential premises

On 21 March 2011 the legislation amending the GST Act to ensure that sales of residential premises under “developmental lease arrangements” received Royal Assent.  On 29 March the ATO published its proposed administrative treatment of the amendments.

The purpose of the amendments is stated on the ATO website to be:

The government has amended the goods and services tax (GST) law to ensure that sales by developers of residential premises constructed under certain arrangements, sometimes called development lease arrangements, will be taxable supplies of new residential premises. This will be the case even though, under the terms of the arrangement, there may have been an earlier ‘wholesale supply’ of the newly built premises to the developer.The amendments also clarify that the subdivision or strata-titling of new residential premises, on its own, does not mean that the premises are no longer new residential premises. Similarly the subdivision or strata-titling of existing residential premises, on its own, does not cause the premises to become new residential premises.Other than the amendment to subsection 40-75(1) of the A New Tax System (Goods and Services Tax) Act 1999 which applies from 21 March 2012, the changes are retrospective from 27 January 2011 subject to certain specific transitional provisions.
The ATO’s administrative treatment is stated to be as follows:
From 21 March 2012, the day of royal assent, each taxpayer will need to review their positions and do one of the following:

  • revise their impacted activity statements lodged since 27 January 2011 (the date of effect of the amendments) if they did not anticipate the changes to the law correctly
  • revise their impacted activity statement lodged since 27 January 2011 (the date of effect of the amendments) if they lodged it in accordance with the law as it was before 21 March 2012
  • do nothing if they anticipated the changes correctly and lodged their activity statements in accordance with the amendments.

Taxpayers who revise their activity statements within 28 days of 21 March 2012 (that is, before 19 April 2012) will not be liable for any penalty or general interest charge (GIC) that may result from the revision. After this time, the normal ATO administrative treatment of penalties and GIC will apply.

To access my page outlining the legislation, its history and background – here.

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