Understanding the implications of GST withholding legislation in property transactions A withholding legislation for GST was introduced on 1 July 2018. This legislation requires purchasers to withhold the GST amount of the purchase price and remit it to the Australian Taxation Office (ATO) upon settlement. The formation of the legislation was a consequence of numerous instances of ‘phoenixing’, where companies would abuse the remittance period between settlement and the lodgement of their next business activity statements by deregistering their companies and creating new ones to avoid their GST payment obligations. It is estimated that $1.8 billion in GST debt was accumulated before the legislative amendments. Companies claimed an estimated $1.2 billion in GST input credits from 2013-2017. The legislation is contained in section 14-250 of the Taxation Administration Act 1953 which specifies that GST must be withheld if you are the recipient of a taxable supply which is potential residential land or a new residential premises (excluding commercial premises or any substantial renovations made to a property). Purchasers who are not registered for GST or are not acquiring the land for a credible purpose (i.e. in the course of their business) remain exempt from this provision. To help the purchasers