Private ruling: GST - sale of property
Date of advice: 29 July 2024
Published: 9 September 2024
Ruling period: ddmmyyyy to ddmmyyyy

Ruling: Q1: Is the sale of the specified property (Property) a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No. For the sale of the Property to be a taxable supply it must meet all the requirements of section 9-5 of the GST Act. One of the requirements of section 9-5 of the GST Act is that the supplier is either registered, or required to be registered for GST (paragraph 9-5(d) of the GST Act). An entity that is not registered for GST, is required to be registered for GST if it is carrying on an enterprise and its projected GST turnover is $75,000 or more. However, under section 188-25 of the GST Act, a supply by way of transfer of ownership of a capital asset is disregarded when calculating an entity's projected GST turnover. In your case, you are not registered for GST and based on the information provided, you are not required to be registered for GST. This is because the sale of the Property is a sale of a capital asset and therefore disregarded when calculating your projected GST turnover. Accordingly, the sale of the Property is not a taxable supply as the sale does not meet all the requirements of section 9-5 of the GST Act.

Relevant facts and circumstances: The Property is approximately X hectares in size and contains a dwelling that is approximately X square meters. The Property was purchased by your deceased spouse pre-CGT. You and your spouse carried on a farming business on the Property. You inherited the Property upon your spouse's death in 20YY. You carried on the farming business on the land until 20YY as a sole trader. You have not been living in the dwelling on the Property. Your principal place of residence has been and is in another specified city. The dwelling on the Property was and is used intermittently during the year such as weekends, holidays, and when maintaining the farming property. Neither the dwelling nor any part of the Property has been leased out. No income is expected to be derived from the Property. Due to your deteriorating health, you want to sell the Property. The Property includes necessary assets to continue as a farming property. You are in the process of selling the Property to a purchaser who intends to use the Property for farming. Your GST turnover is under $75,000. You are not carrying on any other enterprise. You have never been 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 23-5 | 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