GST data recordingAll other GST information must be included in the GST schedule of the agreement. This information is used to determine whether or not there is an obligation of GST, for both the seller and the buyer. (13) In accordance with the contract (the 2000 edition of the Law Society and Real Estate Institute Contractual Form), the seller agreed to sell to the buyer five related plots of land at a price of $3,900,000. This was the adaptation of the GST between the seller and the buyer in accordance with special condition 13 of the contract. For example, the price can be $350,000, including GST. If the developer sells to mom and dad and the developer then returns the GST at the sale price, they end up receiving $304,307, with the rest going to IRD. The Goods and Services Tax (GST) is a standard 15% tax on most goods, services and other items sold or consumed. These include the sale of businesses and, in some cases, residential land. For suppliers, it is important to understand what a payment clause means. This does not give them the opportunity to immediately terminate the first sales contract if they receive a better offer or if the backup offer is unconditional. You should make sure that both the new buyer and the seller understand that the original buyer still has the opportunity to declare their unconditional agreement. In this case, the first (existing) agreement is postponed to the settlement and the second buyer is missed. One of the problems with the rule change was the way the standard ADLS/REINZ sales contract – which documents virtually all land sales – was written.
The problem with the form was that it allowed the buyer to change the agreed price after the seller had been blocked. And yes, you guessed that the buyer would reduce the price by maneuvering very quickly. This hands-on webinar uses case studies to explain the GST aspects of a real estate sales contract and the guarantees granted by the parties. It will help you advise your clients on their GST position when selling and buying land and avoid costly mistakes. Topics discussed include price and price uncertainty, the impact of a party changing its GST status prior to resolution, zero rating, “split deliveries” and the impact of nominations. If you are a buyer or seller looking for a sales contract, you should contact your lawyer or intermediary or a licensed real estate professional. You can also purchase printed and digital sales contract forms online. What the parties had to negotiate was the sharing of the risk of eventually having to be transferred to ATO if the sale was a taxable delivery. This is a frequent reflection, as shown by the printed conditions of the standard contractual form used in Victoria for real estate transactions….