Add GST to the purchase price of newly built property

The Government has recently introduced legislative amendments (due to the Full Federal Court's decision in FCT v Gloxinia Investments (Trustee)) to impose GST on sale of newly constructed residential premises. 

The amendments will ensure that the sale of newly constructed residential premises to home buyers and investors is subject to GST…”  (emphasis added) Further details at: http://assistant.treasurer.gov.au/DisplayDocs.aspx?doc=pressreleases/2011/135.htm&pageID=003&min=brs&Year=&Doc

The aim of the amendments is to ensure:

• that the subdivision of existing residential premises (that are not new residential premises) does not result in the subdivided premises being new residential premises;
  
• that an earlier "wholesale" supply of residential premises under certain arrangements is disregarded in determining whether the later supply of the premises is a supply of new residential premises; and
• the strata titling, and grant of a strata lot lease, over newly constructed residential premises does not itself cause the premises to cease to be new residential premises. This means they are still subject to GST when sold to home buyers and investors.

These changes are proposed to have effect from 27 January 2011 (the date of the Government's announcement that it would amend the law).

This change will have effect on the day the amending Bill receives Royal Assent – presumably in the next few months.