Guide for Australian Property Buyers and Sellers in 2025
Published on May 2, 2025
Buying or selling residential property in Australia can feel overwhelming, especially with changing rules and financial considerations like GST inclusive market value and GST exclusive market value. Many people worry about missing important steps or not understanding their withholding obligation, which can lead to stress or unexpected costs. This guide is here to help you feel more confident and informed as you move through the property process in 2025.
Understanding the 2025 Market and the Role of the Contract Price
The property market in 2025 is shaped by a mix of steady growth, new regulations, and ongoing demand for both residential premises and potential residential land. Whether you’re buying or selling, the contract price is a central figure in your transaction. It’s the agreed amount for the property and forms the basis for many calculations, including GST amount, GST payment, and withholding amount.
Knowing how the contract price affects your responsibilities can help you avoid surprises. It’s important to check if the price is a GST inclusive price or GST exclusive market value and to understand how it relates to your overall costs or proceeds. For certain property transactions, the contract price also determines the GST withholding amount that purchasers pay to the Australian Taxation Office.
What Buyers Need to Know About GST Residential Withholding Payment in 2025
For buyers, understanding GST Residential Withholding (GSTRW) payment is very important. This payment is a portion of the contract price that purchasers pay directly to the Australian Taxation Office when buying new residential premises or potential residential land. The GST withholding obligation is set out in the GST law and applies to taxable supplies of new residential property.
You’ll need to use a GST withholding form and provide a payment reference number and lodgment reference number when making the residential withholding payment. The supplier notification from the seller will tell you if GST withholding applies and the amount to withhold. If you’re buying under an instalment contract, the withholding payment may be due with the first instalment.
How Sellers Can Prepare for GST at Settlement This Year
Sellers also have important steps to take regarding GST at settlement. If you’re selling new residential property, potential residential land, or commercial residential premises, you must provide a written notification to the buyer about their GST withholding obligation. This includes the GST inclusive market value or GST exclusive market value, the GST withholding amount, and instructions for the GST withholding payment.
Being prepared means you can avoid delays at settlement date and ensure the process goes smoothly for both parties. If you don’t meet your obligations, you may incur penalties under the Taxation Administration Act or Treasury Laws Amendment.
Not sure how the margin scheme affects your GST liability?
Get support to accurately report GST and property credits for full compliance.
Exploring the Margin Scheme and Its Impact on Property Sales
The margin scheme is an option that can affect how GST is calculated on certain property sales, such as property subdivision plan sales or previously sold land. It allows GST to be worked out on the difference between the sale price and the original purchase price, rather than the full contract price. This can impact the GST payable and the GST inclusive market.
If you’re considering using the margin scheme, check if you’re eligible and how it will affect your GST liability and reporting on your business activity statement.
The Importance of Completing a GST Withholding Form Correctly
Filling out the GST withholding form accurately is a key step in the process. This form provides the Australian Taxation Office with the details needed to process the GST withholding payment and credit the property credits withholding account or activity statement account.
Mistakes on the form can cause delays or lead to penalties, so it’s worth taking the time to get it right. If you’re unsure, seek advice to avoid errors, especially when using online forms or dealing with non-monetary consideration.
Making a GST Withholding Payment: What to Expect
When it’s time to make a GST withholding payment, you’ll need to follow the instructions provided by the ATO. This usually involves using a payment reference number, a bank cheque payable to the ATO, or electronic transfer, and ensuring the payment is made by the settlement date.
Understanding the process ahead of time can help you stay on track and avoid last-minute issues. If the payment is not made, both the buyer and seller may incur penalties.
Meeting Your GST Withholding Responsibilities as a Buyer or Seller
Both buyers and sellers have GST withholding responsibilities. Buyers must pay the correct withholding amount to the ATO, while sellers need to provide all necessary information and ensure the buyer is aware of their obligations through a supplier notification or separate document.
Clear communication and careful record-keeping can help both parties meet their responsibilities and avoid complications, especially for fully taxable supplies and taxable supply transactions.
Navigating Your GST Withholding Obligation in Property Transactions
GST withholding obligation is a legal requirement for certain property transactions, including sales of new residential premises, potential residential land, and vacant land. It’s important to know when it applies and what steps you need to take, such as completing withholding forms and paying GST.
Staying informed and organised can help you meet your obligations and keep your property transaction on track, whether the property is for residential accommodation, residential and commercial use, or a long-term lease.
What to Consider with an Instalment Contract in 2025
An instalment contract is a payment arrangement where the purchaser pays the contract price in parts over time. If GST applies, the GST withholding payment may be due with the first instalment, not just when settlement occurs.
Understanding how instalment contracts work and what’s required can help you plan your payments and avoid missing deadlines or incurring penalties.
Understanding Fully Taxable Supplies in the Property Market
Some property sales are considered fully taxable supplies, meaning GST applies to the full contract price. Knowing whether your transaction is a taxable supply is important for calculating the correct GST amount and meeting your GST liability.
If you’re a GST registered business, you’ll need to report these transactions on your business activity statement and ensure you pay GST to the ATO.
When and How to Lodge Form for Property Transactions
Lodging the right forms is a key part of the property process. Whether you’re a buyer or seller, you may need to lodge a GST withholding form or other documents with the ATO, especially for certain property transactions.
Knowing when and how to lodge these forms can help you avoid delays and keep your transaction moving forward.
Keeping Track with Your Business Activity Statement After Settlement
After settlement, it’s important to keep your records up to date. If you’re a business, you’ll need to report property transactions and GST payments on your business activity statement. This includes any GST payable, property credits withholding account entries, and activity statement account updates.
Staying organised with your paperwork can help you meet your reporting requirements and avoid any issues with the ATO, especially if you are GST registered.
Conclusion
Buying or selling property in 2025 comes with new rules and responsibilities, including GST withholding, margin scheme, and reporting requirements. By understanding the key steps and staying organised, you can make the process less stressful and more straightforward.
If you have questions or need support, our team is here to help you every step of the way. Taking the time to get things right now can save you time and worry down the track. Are you ready to take the next step in your property journey?
Lukasz Klekowski
