I am in NSW and the property contract has the following special condition in it (it is one long sentence):
Notwithstanding any other provision in this Contract, the Purchaser states that the Property is not new, and at completion will be residential premises to be used solely for residential accommodation and that thus this sale is an input taxed supply and not a taxable supply save that if the Vendor serves a letter from the Australian Taxation Office stating that the Vendor has to pay GST on the price/sale, the Purchaser must pay to the Vendor on demand the amount of GST payable on the price or in respect of this sale including any additional penalty interest and this clause shall not merge upon completion.
Other facts:
- The property is new. The land was purchased 2yrs ago by the Vendor, the existing house demolished, and two new houses built on top of the land with a common wall (as an aside, there is no cross-easement between the two new properties sharing the common wall -- is this a problem?).
- The real estate agent is marketing the property as 'new'
- The Vendor is a director of the company who drew up the plans for the Development Application.
- The Vendor is a director of another company who built the premises.
- on the front page of the contract, under "This sale is not a taxable supply because the sale is:", the box "input taxed because the sale is of eligible residential premises" is marked.
All new properties are sold GST inclusive, however it appears with this special condition, the Vendor is trying to avoid paying GST? If caught, he has this special condition as a get out as the Purchaser will then have to pay the GST?
Is this a case of buyer beware, or are there any statutory rights that the Purchaser can rely on?
Notwithstanding any other provision in this Contract, the Purchaser states that the Property is not new, and at completion will be residential premises to be used solely for residential accommodation and that thus this sale is an input taxed supply and not a taxable supply save that if the Vendor serves a letter from the Australian Taxation Office stating that the Vendor has to pay GST on the price/sale, the Purchaser must pay to the Vendor on demand the amount of GST payable on the price or in respect of this sale including any additional penalty interest and this clause shall not merge upon completion.
Other facts:
- The property is new. The land was purchased 2yrs ago by the Vendor, the existing house demolished, and two new houses built on top of the land with a common wall (as an aside, there is no cross-easement between the two new properties sharing the common wall -- is this a problem?).
- The real estate agent is marketing the property as 'new'
- The Vendor is a director of the company who drew up the plans for the Development Application.
- The Vendor is a director of another company who built the premises.
- on the front page of the contract, under "This sale is not a taxable supply because the sale is:", the box "input taxed because the sale is of eligible residential premises" is marked.
All new properties are sold GST inclusive, however it appears with this special condition, the Vendor is trying to avoid paying GST? If caught, he has this special condition as a get out as the Purchaser will then have to pay the GST?
Is this a case of buyer beware, or are there any statutory rights that the Purchaser can rely on?