Private ruling: Sale of private place of residence
Date of advice: 22 June 2017
Published: October 2017

Ruling: Q1: Will the sale of your property be subject to goods and services tax (GST)? | A1: No, the sale of your property will not be subject to GST under the circumstances (facts) listed below. The sale of the property is not a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) because it is not supplied in the course of an enterprise that you are carrying on. The sale is a private sale of your principal place of residence on which you have not been carrying on enterprises at the time of sale.

Relevant facts and circumstances: ● You jointly owned the property. ● You inherited the property. ● You have lived on the property since the time you inherited the property and used it as your principal place of residence. ● You used part of the property to carry on an enterprise for a few years. You registered for an Australian Business Number (ABN) as a partnership when you carried on this enterprise. However, you did not register for GST as the GST turnover was below the registration turnover threshold. The enterprise ceased on a particular date and thus the ABN of the partnership was also cancelled as of this date. ● You do not carry on any other enterprise. ● The property has been earmarked by the local council for future residential and commercial development. ● You intend selling the property at some future date. The sale of the property is intended to be the mere realisation of the family home which will be done under a standard contract of sale. ● You have vacated the house and provided it to an associate to take care of the property until it is sold. The associate currently uses the house as their residence. ● The sale of the property will be in its’ current condition. That is, it will be sold with no improvements to the land and with the house intact on the land. Your contract of sale will not include any clauses/conditions whereby the purchaser and or a third party will be allowed into to the property to develop the property prior to settlement of the contract of sale. Accordingly, the purchase price of the property will not reflect any development activity that might take place on the property prior to settlement of the contract of sale.

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