Private ruling: GST and the sale of property under and Options Deed
Date of advice: 26 September 2016
Published: November 2016

Ruling: Q1: Is the sale of your principle place of residence which will be made as a result of granting of a call option and sale contract a taxable supply? | A1: No, provided that none of the clauses of the Option Deed contradict with any sale facts as presented below, the sale of your private place of residence is not a taxable supply. The sale by you is private and domestic in nature and is not made in the course or furtherance of an enterprise that you are carrying on.

Relevant facts and circumstances: You are the registered proprietors of the Property. The Property comprises a residential dwelling, some sheds, water closet and a granny flat. You have owned the Property for a number of years. During this time the Property has been used as your principal place of residence apart from the granny flat on the Property which has been rented out as a residence on an ad-hoc basis. You entered into a Call Option Deed to sell the Property. You have not provided a copy of this Call Option Deed to the Australian Tax Office. The purchaser will develop the Property. You will not be carrying on an enterprise in your own accord or with the property developer or any other entity in regards to the Property. The sale price of the Property will not be reduced by or increased by any proportion of the development activities undertaken by the property developer or any other party on the Property. In other words, the sale price of the property will only reflect the market price of the Property at the time of sale as per it’s current state and not take into account any development/improvement that the developer or any other entity may undertake during the Option period.

Relevant legislative provisions: Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)