GST (Goods and Services Tax) touches more property deals than many realise, yet it's not always straightforward. Whether you're buying or selling, the key is understanding when GST applies - and when it doesn't - while knowing when to refer to a qualified accountant, solicitor, or tax adviser for the finer points.
This article provides general information only and does not constitute financial, taxation, or legal advice. Always seek advice from a qualified solicitor, conveyancer, or tax professional to confirm how GST applies to your individual circumstances. Requirements and rates may change - check the latest information with the Australian Taxation Office (ATO).
The Basics: What GST Is
GST is a 10% tax on most goods and services in Australia, including some property transactions. In real estate, GST can apply to the sale of new residential property, commercial property, and vacant land sold as part of a business.
However, most established homes are GST-free, which is why many residential sales between private individuals don't involve GST at all.
Always check with your solicitor or accountant to confirm how the ATO classifies the property type before marketing or signing.
Buying New vs Established Property
When purchasing a newly built home, a home that's been substantially renovated, or a new subdivision lot, GST generally applies. In those cases, the contract price usually includes GST, but it's essential to confirm this with the agent and solicitor before signing.
For established homes, GST typically doesn't apply, though stamp duty and conveyancing fees still do.
Always confirm with your solicitor or conveyancer whether GST is included in the purchase price and if a GST withholding is required at settlement.
GST Withholding at Settlement
The Australian Taxation Office (ATO) requires certain buyers to withhold GST at settlement and pay it directly to the ATO. This usually affects new residential property or potential residential land sold by developers.
If you're buying such property, your conveyancer or solicitor will handle the required forms and payments.
Real estate agents can outline the process, but only a solicitor or accountant can confirm the specific obligations for your transaction.
Selling Property: When It Might Apply
If you're selling a family home or investment property, GST generally won't apply unless the sale forms part of a business or development activity. But for builders, developers, or anyone who regularly subdivides or sells land, GST registration and reporting may be required.
Always advise sellers to check with their accountant or the ATO before listing, to confirm whether GST should be included in the sale price.
Commercial and Mixed-Use Properties
Commercial properties are normally subject to GST, unless the sale qualifies as a 'going concern' - for example, a tenanted building sold with an ongoing lease. To be GST-free under this rule, both buyer and seller must be GST-registered and agree in writing.
Buyers and sellers should seek written advice from their solicitor or accountant before including a going-concern clause in any contract.
Always Get Professional Advice
GST doesn't have to be complicated, but it does demand attention. Whether you're buying, selling, or developing property, understanding the basics helps you spot when specialist advice is needed and avoid costly surprises at settlement. Clear communication between your agent, solicitor, and accountant ensures every figure in your contract is accurate - and that your property transaction runs smoothly from start to finish.
You might also like
Disclaimer: Every effort has been made to ensure the accuracy of the information provided, but we make no guarantees regarding its completeness or reliability. The data is presented for general informational purposes only and does not constitute financial, investment, or legal advice. We are not liable for any errors, omissions, or consequences arising from its use. Users should verify details with relevant sources and seek professional advice where appropriate for the most accurate and up-to-date guidance.
