Private ruling: GST and the sale of real property
Date of advice: 27 August 2015
Published: August 2015

Ruling: Q1: Will the sale of the commercial property be a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: For the sale to be a taxable supply all the requirements of section 9-5 of the A New Tax System GST Act must be satisfied. The sale satisfies the requirements of paragraphs 9-5(a), 9-5(b) and 9-5(c) of the GST Act as follows: • the sale is made for consideration • the sale is made in the course of the leasing enterprise that you are carrying on, and • the sale is connected with Australia because the Property is in Australia. However, the requirement of paragraph 9-5(d) of the GST Act is not satisfied because you are not registered. Furthermore, you are not required to be registered for GST because you do not meet the registration turnover threshold. The sale of the commercial property constitutes a transfer of ownership of a capital asset and the proceeds from the sale are excluded in the calculation of your projected GST turnover. Therefore, as not all the requirements of section 9-5 of the GST Act are met, the sale of the Property is not a taxable supply.

Relevant facts and circumstances: You own a commercial property. You are intending to sell your commercial property for $X. You were carrying on a leasing enterprise in respect of the commercial property. The commercial property was leased to an unrelated entity and you were receiving rental income of less than $75,000 per annum. The commercial property will be sold with vacant possession. You do not own any other commercial or investment properties. You do not carry on any other enterprise. You do not have an ABN and are not registered for GST.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 section 9-20 | A New Tax System (Goods and Services Tax) Act 1999 section 23-5 | A New Tax System (Goods and Services Tax) Act 1999 section 188-5 | A New Tax System (Goods and Services Tax) Act 1999 section 188-10 | A New Tax System (Goods and Services Tax) Act 1999 section 188-15 | A New Tax System (Goods and Services Tax) Act 1999 section 188-20 | A New Tax System (Goods and Services Tax) Act 1999 section 188-25.