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Add GST to the purchase price of newly built property

31/10/2011

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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.

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New Neighbourhood Disputes Resolution Act 2011 (Qld)

31/10/2011

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Practitioners are also reminded that the Neighbourhood Disputes Resolution Act 2011 will commence on 1 November 2011. The Act requires a party to provide a buyer, before the contract is signed, a copy of an application or order subject to the Act. This requirement will be included in the new editions of the REIQ Contracts.

General public information is available at neighbourhooddisputes.qld.gov.au. 

Parties, including agents, to property sale should turn their minds to meet this new obligation when reducing their agreement to writing.
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2011-12 State Budget - Changes to various duties & grants

15/6/2011

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According to the Qld Office of State Revenue, the 2011–12 State Budget  introduces a number of significant changes to Queensland’s revenue laws, including:

Queensland building boost grant

The $10,000 Queensland building boost grant (QBBG) is available to any person or corporation buying or building a new home to live in or to rent out for investment purposes. The QBBG will be available for homes less than $600,000 from 1 August 2011 to 31 January 2012.

Transfer duty home concession

The home concession for transfer duty will cease on 31 July 2011. The concession is currently available to people who are not first home buyers 
but purchase a home to live in as their principal place of residence. 

New transfer duty rates

The transfer duty rate structure will be revised in light of the removal of the home concession. The new structure will ensure that the transfer duty payable on a home will continue to be lower in Queensland than under the standard rate in any other mainland Australian state. The rate changes commence from 1 August 2011.

First home and first home vacant land transfer duty concession

The first home transfer duty concession and first home vacant land concession continue to apply. However, the concession rates will be revised in light of the removal of the home concession. In particular, the concession will reduce for values from $500,000 to $600,000 against duty at the standard rate. These changes commence from 1 August 2011.

Regional first home owner grant

The standard $7,000 first home owner grant will continue to apply. However, the regional first home owner grant will cease on 30 June 2011. This grant currently provides an additional $4,000 for the purchase of a new home in regional Queensland by a first home buyer.

Land tax cap

The 50% cap on the annual increase in land values for land tax purposes 
will continue to apply for 2011–12 land tax assessments.

Payroll tax—apprentice and trainee rebate

The payroll tax rebate of 25% of the eligible wages of apprentices and trainees has been extended to the 2011–12 financial year.

Landholder duty

Landholder duty replaces Queensland’s land rich duty from 1 July 2011. It will apply to the acquisition of 50% or more of an unlisted company or 90% or more of a listed company or listed unit trust holding land in Queensland worth $2 million or more.

Royalties—change in revenue administration

As part of the government’s move to centralise revenue collection, responsibility for mineral and petroleum royalty administration will transfer from the Department of Employment, Economic Development and Industry to OSR from 1 July 2011. Revenue collection will also change from quarterly to monthly collections in 2012, with implementation to be undertaken in consultation with the mining industry.

For further information, please contact DC Lawyers on 07 3009 5430.



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