Private ruling: GST - sale of property
Date of advice: 27 March 2026
Published: 29 June 2026
Ruling period: 1 July 2025 to 30 June 2027
Date scheme commenced: 1 July 2025

Ruling: Q1: Will the sale of xxxx (Property A) by you, be a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No, the sale of Property A will not be a taxable supply as it does not meet all the requirements under section 9-5 of the GST Act.

Relevant facts and circumstances: In xxxx, xxxx (collectively, you) purchased xxxx (the Property). You are not registered for GST. From the date of purchase, you occupied the dwelling as your Primary Place of Residence (PPR). In xxxx, you organised the demolition of the existing dwelling at the Property to construct two new townhouses which would become Property A and Property B. Your intention was to replace the ageing and dilapidated home with a new residence for yourselves and to provide additional accommodation for elderly relatives living nearby. Following the passing of those relatives, the longer-term intention was to retain the additional dwelling as a rental investment. Funds were borrowed to finance the construction. The Occupancy Certificates were issued on xxxx and construction was completed in xxxx. The finalisation of the formal legal subdivision of the single title into two separate titles was not finalised by the local Council until xxxx. The subdivision was delayed due to your responsibilities in caring for elderly relatives both in Australia and overseas. No funds were borrowed to finance the subdivision. Throughout the whole process, you did not claim any GST credits for the construction and/or subdivision for both properties. You commenced residing at Property A in xxxx. There have been no previous, current or planned subdivision or land development activities undertaken by the you or related entities. You do not hold any other investment properties. Property A is now larger than required for your current needs. You wish to reduce debt and free up capital to support your family and upcoming retirement. Therefore, you have decided to sell Property A Property A was first advertised for sale on xxxx. You are currently in the process of selling Property A and are actively seeking alternative residence. Property B was initially occupied by your parents from xxxx until their transition into aged care in xxxx. From the xxxx financial year onwards, the property has been rented out until xxxx. Property B has been leased to unrelated third parties, and the rental income has been declared in your tax returns. The first rental income was received on xxxx. The lease agreement with the previous tenants ended in late xxxx. The property is currently occupied by your daughter; however, it is not subject to any formal lease arrangement. The long-term intention is to retain Property B as an investment property.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 - section 9-20 | 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 | A New Tax System (Goods and Services Tax) Act 1999 - section 195-1

Reasons for decision: Summary: Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides you make a taxable supply if: a) you make the supply for consideration; and b) the supply is made in the course or furtherance of an enterprise that you carry on; and c) the supply is connected with the indirect tax zone; and d) you are registered, or required to be registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. In this instance, your supply of Property A will be made for consideration and will be made in the indirect tax zone (Australia). Therefore, paragraphs 9-5(a) and 9-5(c) of the GST Act will be satisfied. Consequently, it must be considered whether the sale of Property A is in the course or furtherance of an enterprise that you carry on under paragraph 9-5(b) and whether you are required to be registered for GST under paragraph 9-5(d). | Detailed Reasoning - Who is required to be registered for GST: Section 23-5 of the GST Act outlines who is required to be registered for GST. It states: You are required to be registered under this Act if: a) you are * carrying on an • enterprise; and b) your * GST turnover meets the * registration turnover threshold. (* denotes a term defined in section 195-1 of the GST Act.) | Detailed Reasoning - Enterprise: Section 9-20 states that: An enterprise is an activity, or series of activities, done: a) in the form of a *business; or b) in the form of an adventure or concern in the nature of trade; or c) on a regular and continuous basis, in the form of a lease, licence or other grant of an interest in property; or ... The phrase 'carrying on' in the context of an enterprise includes doing anything in the course of the commencement or termination of the enterprise. Miscellaneous Taxation Ruling MT 2006/1 The New Tax System: the meaning of entity carrying on an enterprise for the purposes of entitlement to an Australian Business Number (MT 2006/1) considers the meaning of the terms 'entity' and 'enterprise' for the purposes of the A New Tax System (Australian Business Number) Act 1999 (ABN Act). The ABN Act uses the definitions of these terms that are contained in the GST Act. The principles in that Ruling apply equally to the terms 'entity' and 'enterprise' and can be relied upon for GST purposes. Paragraph 178 of MT 2006/1 outlines some of the main indicators of carrying on an enterprise as being: • a significant commercial activity; • a purpose and intention of the taxpayer to engage in commercial activity; • an intention to make a profit from the activity; • the activity is or will be profitable; • the recurrent or regular nature of the activity; • the activity is carried on in a similar manner to that of other businesses in the same or similar trade; • activity is systematic, organised and carried on in a businesslike manner and records are kept; • the activities are of a reasonable size and scale; • a business plan exists; • commercial sales of product; and • the entity has relevant knowledge or skill. In relation to the words 'in the form of an adventure or concern in the nature of trade', paragraph 244 of MT 2006/1 states: 244. An adventure or concern in the nature of trade includes a commercial activity that does not amount to a business but which has the characteristics of a business deal. Such transactions are of a revenue nature. However, the sale of the family home, car or other private assets are not, in the absence of other factors, adventures or concerns in the nature of trade. The fact that the asset is sold at a profit does not, of itself, result in the activity being commercial in nature. The Explanatory Memorandum (EM) to the A New Tax System (Goods and Services Tax) Bill 1998 provides guidance at paragraph 3.10: "'In the course or furtherance' is not defined but is broad enough to cover any supplies made in connection with your enterprise. An act done for the purpose or object of furthering an enterprise, or achieving its goals, is a furtherance of an enterprise although it may not always be in the course of that enterprise. 'In the course or furtherance' does not extend to the supply of private commodities , such as when a car dealer sells his or her own private car." Subject to the above, you are not carrying on an enterprise of developing and selling property. You did not acquire the Property with the intention of making a profit from its sale. This is evidenced by the lengthy period of ownership, including residing in Property A as your primary place of residence since the completion of the construction in xxxx as well as the Property before the subdivision and development of Property A and Property B. | Detailed Reasoning - GST turnover threshold: Subsection 188-10(1) provides that you have a GST turnover that meets the registration turnover threshold if: a) your current GST turnover is at or above $75,000 and the Commissioner is not satisfied that your projected GST turnover is less than $75,000; or b) your projected GST turnover is at or above $75,000. Your 'current GST turnover' is defined in section 188-15 as the sum of the values of all of your supplies made in a particular month and the preceding 11 months. Your 'projected GST turnover' is defined in section 188-20 as the sum of the values of all of your supplies made in a particular month and the following 11 months. However, your current and projected GST turnover does not include supplies that are input taxed, supplies that are not for consideration (and are not taxable supplies under section 72-5), or supplies that are not made in connection with an enterprise that you carry on. Throughout the period of ownership, your GST turnover has not exceeded $75,000 and therefore you have not been required to register for GST. It is necessary to determine whether your projected GST turnover meets the registration turnover threshold. Section 188-25 requires you to disregard the following when calculating your projected GST turnover: a) any supply made, or likely to be made, by you by way of transfer of ownership of a capital asset of yours; and b) any supply made, or likely to be made, by you solely as a consequence of: (i) ceasing to carry on an enterprise; or (ii) substantially and permanently reducing the size or scale of an enterprise. Goods and Services Tax Ruling GSTR 2001/7 Goods and services tax: meaning of GST turnover, including the effect of section 188-25 on projected GST turnover (GSTR 2001/7 ) explains the meaning of 'capital asset' in the context of section 188-25 in paragraphs 31 to 36 : Meaning of 'capital assets' 31. The GST Act does not define the term 'capital assets'. Generally, the term 'capital assets' refers to those assets that make up 'the profit yielding subject' of an enterprise. They are often referred to as 'structural assets' and may be described as 'the business entity, structure or organisation set up or established for the earning of profits'. 32. 'Capital assets' can include tangible assets such as your factory, shop or office, your land on which they stand, fixtures and fittings, plant, furniture, machinery and motor vehicles that are retained by you to produce income. 'Capital assets' can also include intangible assets, such as your goodwill. 33. Capital assets are 'radically different from assets which are turned over and bought and sold in the course of trading operations'. An asset which is acquired and used for resale in the course of carrying on an enterprise (for example, trading stock) is not a 'capital asset' for the purposes of paragraph 188-25(a). 34. 'Capital assets' are to be distinguished from 'revenue assets'. A 'revenue asset' is 'an asset whose realisation is inherent in, or incidental to, the carrying on of a business'. 35. If the means by which you derive income is through the disposal of an asset, the asset will be of a revenue nature rather than a capital asset even if such a disposal is an occasional or one-off transaction. Isolated transactions are discussed further at paragraphs 46 and 47 of this Ruling. 36. Over the period that an asset is held by an entity, its character may change from capital to revenue or from revenue to capital. For the purposes of section 188-25 the character of an asset must be determined at the time of expected supply. Paragraphs 258 and 259 of MT 2006/1 contain guidance on the distinction between trading/revenue assets and investment/capital assets. While MT 2006/1 discusses these principles in the context of entitlement to an ABN, these principles in paragraphs 258 and 259 have equal application to determining whether the sale of something is a revenue or capital asset for GST registration purposes. Paragraphs 258 and 259 provide the following: As discussed above, the sale of Property A will not be made in the course or furtherance of any enterprise you carry on, as it involves the sale of a private asset. Accordingly, the sale of Property A will be excluded when calculating your projected GST turnover. You will consequently not be required to register for GST under section 188-10 of the GST Act. Therefore, the sale of Property A will not be a taxable supply under section 9-5 of the GST Act as the sale is not in the course or furtherance of an enterprise and you are not registered or required to be registered for GST.

Assets can be categorised as trading/revenue assets or capital/investment assets. Assets purchased with the intention of holding them for a reasonable period of time, to be held as income producing assets or to be held for the pleasure or enjoyment of the person, are more likely not to be purchased for trading purposes. | Examples of capital/investment assets are rental properties, business plant and machinery, the family home, family cars and other private assets. The mere disposal of capital/investment assets does not amount to trade.