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Delays in GST at settlement processing

Friday, 31 January 2020

Delays in GST at settlement processing

The Australian Taxation Office advise that some conveyancers, solicitors, and settlement agents are causing delays in processing GST property credits due to two avoidable errors which have significantly increased in the last few months.

1: Not lodging Form two – GST property settlement date confirmation

Form two must be lodged to confirm all settlements if your clients have a withholding obligation. This form records the purchaser’s withholding liability against their account when the property settlement occurs. When Form two and payment is received on the date of settlement, the credit for the withheld amount is allocated to the supplier's GST property credits account and the purchaser will receive their payment confirmation email. When Form two isn’t lodged, it prevents the automated process causing delays as the payment is placed into suspension until manual intervention is completed by the ATO.

If you realise you haven’t lodged Form two, lodge it as soon as possible by going to ato.gov.au/gstpropertyforms. Your purchaser clients may be subject to failure to lodge penalties when forms aren’t lodged.

2: Lodging multiple Form twos – GST property settlement date confirmation

By lodging multiple forms, the ATO’s automated process is prevented and places payments into suspension until the ATO manually processes the payment. If you have lodged more than one Form two or know a change is required, cancel Form two by phoning the ATO. After the form has been cancelled, then lodge a new Form two if required. If payment was made when the incorrect Form two was lodged, it will match up with the new Form two.

To amend or cancel forms, you can phone the ATO on 13 28 66 (Fast Key Code 3 4).

More information

Check ato.gov.au/gstpropertyforms for all information you need about the GST at settlement forms. More detail is available on the ATO’s website at ato.gov.au/gstatsettlement, including a video about how the GST at settlement process works.