Private ruling: GST and sale of property
Date of advice: 9 March 2017
Published: August 2017

Ruling: Q1: Are you making a taxable supply when you sell your property situated at a specified location? | A1: No. GST is payable on any taxable supplies that you make. One of the requirements of a taxable supply include that you are registered or required to be registered for GST. Whilst, for GST purposes, you are considered to be carrying on an enterprise by conducting activities on a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property (i.e. leasing real property) you are neither registered nor required to be registered for GST. The sale of your Property is considered to be the transfer of ownership of a capital asset which is disregarded when calculating your projected GST turnover for GST registration purposes.

Relevant facts and circumstances: You are not registered for GST. You purchased property located at a specified location (the Property) in 20XX. You leased the Property from the date of acquisition to present date. You applied to the relevant local council for a planning permit to build X townhouses in early 20YY. The planning permit was approved/granted in 20ZZ. You have decided to sell the Property. You have not carried out any works on the Property (or engaged another party to carry out any works on the Property) other than required in order to obtain approval of the planning permit. The Property will be sold with the current existing residence (i.e. the existing house will not be demolished prior to the sale). You do not carry on any other enterprise other than the leasing of residential premises.

Relevant legislative provisions: A New Tax System (Goods and Services Tax Act) 1999 Section 9-40 | Section 9-5 | Section 9-20 | Section 23-5 | Division 188 | Section 188-10 | Paragraph 188-25(a)