Private ruling: Sale of property
Date of advice: 7 July 2017
Published: January 2018

Ruling: Q1: Is the sale of property a taxable supply? | A1: No, the sale of property is not a taxable supply.

Relevant facts and circumstances: ● Two taxpayers (you) own the property to be sold. ● You use the property partly as your principal place of residence and own it as joint tenants. ● The house on the property is not new residential premises. ● You operated an enterprise on the property. You are registered for GST as individuals and as a partnership. ● You never received rent from the partnership for use of the property by the partnership. ● You negotiated with a land developer (developer) to sell the property, and contracts for the sale of the property were exchanged. ● You ceased your business operations.

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 184-1(e) | A New Tax System (Goods and Services Tax) Act 1999 section 184-5

Reasons for decision: Summary: In order to be a taxable supply under paragraph 9-5 of the GST Act, the sale of the property would have to be made in the course or furtherance of an enterprise that the taxpayers carry on. Some part of the property was used as residential premises and another part was used to allow a partnership to carry on business activities. The land was never listed as an asset of that partnership, no fees or rent were received and the land was provided to the partnership under an arrangement which was no more than a consent for the partnership to use the land for its business activities . There was no formal or any other type of lease in place, and all farming activities on the land have now ceased. The taxpayers are selling the property as private individuals who are not required to be registered for GST for the purposes of that sale. The sale of the property is not a taxable supply, and the taxpayers will not be liable for GST on the sale of the property.