Articles in Category: Business

General business information that may be of interest to leaders and business owners


Government turns GST on its head for new property sales

Sourced article

Government turns GST on its head for new property sales

Steve Healy Jon Denovan Cameron Steele
 
Australia May 12 2017

The Budget measures include a radical plan to shift the responsibility of accounting for GST from property developers to purchasers. Under the proposal, purchasers must remit the GST directly to the Australian Taxation Office (ATO) as part of the settlement process.

The proposal will apply to newly constructed residential properties and new subdivisions from 1 July 2018.

What does this mean for the developers?

The full impact fordevelopers will depend on the final form of the legislation. The critical question is whether the purchaser’s liability will be interim or final.

If the purchaser’s liability to account for GST is non-final, the purchaser may be required to collect a notional amount and a true-up may then occur when the property developer submits its business activity statement (BAS). This may present cash-flow and funding issues for developers, particularly if the GST amount remitted by the purchaser is significantly more than the developer’s actual GST liability.

realestate.com.au v Domain: misleading statements that ‘brought the house down'

Sourced from www.mondaq.com March 14 2017

 

Last Updated: 12 March 2017
Article by Catherine Ballantyne
 
In brief: A recent dispute between two well-known media players illustrates the need for businesses to carefully word advertisements and accurately document achievements or they could be considered misleading or deceptive.
 

What you need to know:

  • Be careful to be accurate in all forms of advertising.
  • When stating you have "the most" or are the "highest rated" you need to be able to provide evidence on how you have come to this conclusion.
  • If you use an asterisk to qualify your advertisement, make sure that both it and the content next to the asterisk are easy to see and read.

Background

In the recent case, REA Group Limited ("REA") v Fairfax Media Limited ("Domain")[2017] FCA 91, Domain was found to be in breach of the Australian Consumer Law (ACL) for making misleading and deceptive representations (or representations likely to mislead and deceive) in two of a number of advertisements run in February 2016.

The advertisements in question promoted the Domain app as being the best, most highly rated app, with the most listings, in contrast to competitor apps such as REA's realestate.com.au app. The decision turned largely on an analysis of:

  • how a largely uninformed cross section of the public would respond to the advertising; and
  • whether the claims could be dismissed as "puffery", which is common within the advertising industry.

The Court held that the advertisements had to be considered through the eyes of:

  • members of the public with an interest in the property market in NSW, Victoria and Queensland; and
  • real estate agents who lease or sell property in NSW, Victoria, and Queensland.