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The Assistant Treasurer has released for comment draft legislation which proposes to ensure that, for GST purposes sales, or long-term leases, of:
The proposed legislative changes are in response to the Full Federal Court's decision in FCT v Gloxinia Investments (Trustee). In that case, the Full Court held that a developer's sales of newly constructed residential premises (constructed under a "development lease" arrangement) were input taxed supplies under Subdivision 40-C of the GST Act. The Government said the outcome of the case was contrary to the policy intent of the GST legislation and therefore amendments to the GST law are required.
The exposure draft legislation and associated draft explanatory memorandum are available on the Treasury website here.
The aim of the amendments is to ensure:
These changes are proposed to have effect from 27 January 2011 (the date of the Government's announcement that it would amend the law).
The changes aim to clarify that premises that become "new residential premises" due to substantial renovations, or because they have been built to replace demolished premises, cease to be new residential premises once they are sold or supplied by way of long term lease as residential premises.
This change will have effect on the day the amending Bill receives Royal Assent.
Comments were due by 21 October 2011. Enquiries should be directed to Jonathan Przydacz of the Treasury on (02) 6263 4301.
Source: Assistant Treasurer's media release No 135, 23 September 2011
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