Private ruling: GST - sale of residential premises
Date of advice: 4 May 2026
Published: 13 July 2026
Ruling period: <Date> to <date>
Date scheme commenced: <date>

Ruling: Q1: Are you making a taxable supply pursuant to section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when you sell the property located at <property address> (the Property)? | A1: No. | Q2: Are you eligible to apply the margin scheme under Division 75 of the GST Act to your supply of the Property? | A2: No.

Relevant facts and circumstances: This private ruling is based on the facts and circumstances set out below. If your facts and circumstances are different from those set out below, this private ruling has no effect and you cannot rely on it. Find out more about when you can rely on your private ruling at ato.gov.au/relyonprivateruling. You, the Trustee for <trust name>, are not registered for GST. Your corporate trustee is <<entity name>> and its current sole director is <individual name>. Its current shareholders were considered. You were established on <date> pursuant to a Fixed Unit Trust Deed. Your current registered unitholders include: • <Individual name> in his capacity as trustee for <Trust A>, • <Two individuals> in their capacity as trustees for <Self-managed superannuation fund A (SMSF A)>, • <Individual name>) in his capacity as trustee for <Trust B>, • <Five individuals> in their capacity as trustees for <SMSF B> (collectively the Unitholders). Two of the individuals are business partners and are together the controlling minds of the Trust. You were established to enable the Unitholders to pool funds for the purpose of acquiring a premium residential property to be held as a long-term capital investment with an associated income stream (by leasing that property to senior executives of multinational companies on secondment to Australia from overseas) that would ultimately support two of the individuals' retirement. It was always intended that you would operate in such a way that would allow you to meet the requirements of a non-geared unit trust for the purposes of regulation 13.22C of the Superannuation Industry (Supervision) Regulations 1994. This was to allow the SMSFs to acquire units in the trust without breaching the in-house asset rules. Purchase of the Property On <date>, <<entity name>> in its capacity as trustee entered into a contract to purchase a residential property located at <property address>, from the vendors for $<amount> (contract of purchase). The sale price did not include GST. The vendors were third parties unrelated to you. Settlement occurred on <date>. You funded the purchase of the original Property entirely from capital contributions from the Unitholders. The Unitholders did not borrow funds to make their respective capital contributions; rather, capital contributions were made from existing cash reserves and/or sale of their other investments. When purchased, the property consisted of a rundown residential dwelling situated on an <number> square metre block in <<state>> (the original Property). While the existing dwelling was not suitable for the premium rental market you intended to target, you nevertheless considered that, given the property's characteristics, it would constitute an excellent long-term investment, with its value expected to appreciate over time and with further potential for improvement through renovation or reconstruction of the dwelling. At the time you entered into the contract to purchase the original Property, you intended to engage a licensed builder to demolish the existing dwelling and construct a new residence to hold as a long-term capital investment and to lease it to multinational companies at premium rental rates for the purpose of housing their executives and their families. You provided email communications which support your investment intentions from the outset. Whilst no business plans, economic modelling or detailed financial projections were prepared prior to purchasing the property and embarking on its development, the controlling minds had a general idea of: • how much they wanted to spend on the purchase of the property, demolition of the existing dwelling on the Property and the construction of the new residence (in respect of which they had sought high-level, indicative quotes from builders); and • the amount of rent they were likely to be able to obtain after the new residence had been constructed (in respect of which they had engaged in verbal discussions with local real estate agents), in order for the Property to deliver a sufficient rental yield to constitute a viable long-term investment for the Trust. Based on enquires made with construction companies in or around <month/year> (before executing the contract to purchase the original Property and its settlement) you estimated that: Development of the Property On <date>, you were granted a permit by the Council to demolish the existing dwelling on the Property. Demolition occurred in <month/year>. The existing dwelling was not leased for any period of time prior to its demolition. On <date>, you submitted a development application (DA) for the construction of a new residence on the Property. Approval was granted <date>. You subsequently submitted an amendment to the approved DA to change part of the approved roof garden area into an accessible roof terrace and to modify the approved concealed roof to a pitched roof. Your application was refused by the Council on <date>. On <date>, you filed a review application with the Tribunal to resolve the issues and were ultimately granted planning approval by the Tribunal on <date>. On <date>, you entered into a 'Cost Plus Contract' with a builder to construct the new luxury residence. In addition, the contract provides for a defined builders fee of $<amount>. Based on the architectural plans/drawing, selected design specifications and finishes, and landscaping you estimated the total cost would be approximately $<amount>. The building permit for the construction of the new residence was issued by the Council <date>, and construction works commenced on <date>. In developing the property, you encountered not only significant delays in the development's approval process as detailed above but also cost blowouts of more than <x>% over budget, caused by increases in the cost of building materials and the services of trades people following the COVID-19 pandemic. The GST-inclusive cost of building, finishing and landscaping the new residence ended up being approximately $<amount> (or about $<amount> higher than what you had anticipated when you entered into the contract for the purchase of the Property). The construction costs were funded via further capital contributions from the Unitholders. Once again, the Unitholders did not borrow funds to make their respective capital contributions, their contributions were made from existing cash reserves and/or sale of their other investments. Construction of the new luxury residence was completed in <month/year>. The new luxury residence is built on the original block, over <number> levels and is serviced by an elevator. It consists of <number> bedrooms, <number> ensuite bathrooms, home office, <number> living areas, a front-of-house kitchen and a fully concealed back-of-house kitchen both fully equipped with high-end appliances, a wine cellar, outdoor pool and spa, <number> car garage with car-turntable located on the lower level and a rooftop entertaining deck (the Property). You provided the floor plan of the Property. In the lead-up to the completion of the new luxury residence, you consulted with a leasing agent specialising in the high-end rental market. They provided recommendations on advertising and rental marketing strategies and indicated that the maximum weekly rent attainable for the Property would be approximately $<amount>. They also indicated that they had a potential tenant willing to rent the Property at that amount. You also obtained a formal rental appraisal for the Property from <<entity name>> on <date> that showed based on market and condition of the Property the estimated rental return would be approximately $<amount> per week. Sale of the Property Given the significant construction delays, cost blowouts and holding costs during the period of construction with no rental income, the projected maximum weekly rent of $<amount> represented an unacceptably low rental yield on your $<amount> capital investment and fell well below the return you had expected from leasing the property. You consequently decided to sell the Property to recoup the Unitholders' capital contributions and return those funds to them for reinvestment in more commercially viable investments. On <date> you engaged a real estate agent to market and sell the Property. On <date>, <<entity name>> in its capacity of trustee entered into a contract to sell the Property to the buyer for $<amount> (Contract of Sale). You provided a copy of the Contract of Sale, and its GST annexures were considered. Settlement was scheduled to occur on <date>. Whilst you intended to lease the Property and made relevant enquiries you did not lease the Property before selling it. Other Aside from the purchase and development of the Property, you do not undertake any other activities or hold any other material assets. Your Unitholders do not intend to undertake any further activities through this unit trust and currently plan to wind up the trust after settlement of the Property. The trustees of the Unitholders are not experienced property developers or speculators nor do they or have they worked in the construction or property development industries. Their current or previous respective occupations were considered.

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 9-20 | A New Tax System (Goods and Services Tax) Act 1999 section 9-40 | A New Tax System (Goods and Services Tax) Act 1999 section 23-5 | A New Tax System (Goods and Services Tax) Act 1999 section 23-10 | A New Tax System (Goods and Services Tax) Act 1999 section 23-15 | A New Tax System (Goods and Services Tax) Act 1999 section 40-35 | A New Tax System (Goods and Services Tax) Act 1999 Section 40-65 | A New Tax System (Goods and Services Tax) Act 1999 Section 75-5 | 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 | A New Tax System (Goods and Services Tax) Regulations 2019 regulation 23-15.01

Reasons for decision: Detailed Reasoning - Detailed reasoning: In this ruling, • unless otherwise stated, all legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) • all legislative terms of the GST Act marked with an asterisk are defined in section 195-1 of the GST Act. • all reference materials, published by the Australian Taxation Office (ATO), that are referred to are available on the ATO website ato.gov.au Section 9-5 provides that you make a taxable supply if: a) you make the supply for consideration; b) the supply is made in the course or furtherance of an enterprise that you carry on; c) the supply is connected with the indirect tax zone; and d) you are registered or required to be registered. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. Division 38 and 40 provide for certain supplies to be GST-free and input taxed respectively. There are no provisions of the GST Act under which your sale of the Property is GST-free, therefore we need to consider whether the supply of the Property is input taxed. | Detailed Reasoning - New residential premises: Section 40-65 provides that the sale of real property (residential premises) is input taxed. However, the sale of residential premises is not input taxed to the extent that the residential premises are new residential premises. Subsection 40-75(1) states; (1) Residential premises are new residential premises if they: (a) have not previously been sold as residential premises (other than commercial residential premises) and have not previously been the subject of a long-term lease; or (b) have been created through substantial renovations of a building; or (c) have been built, or contain a building that has been built, to replace demolished premises on the same land. Paragraphs (b) and (c) have effect subject to paragraph (a). However, subsection 40-75(2)(c) provides that a residential premises is not new residential premises if, for the period of at least 5 years since the premises were last built, the premises have only been used for making supplies that are input taxed by way of lease, hire or licence under subsection 40-35(1)(a). In this case, the Property comprises a new luxury residential premises that was constructed to replace the original run-down dwelling on the land. The new luxury residential premises has not been previously sold as residential premises and has not been leased for any period; therefore, the Property is new residential premises pursuant to section 40-75(1) and its sale is not input taxed. The supply of the Property will be taxable if all the requirements of section 9-5 are met. You satisfy the requirements of paragraphs 9-5(a) and (c) as your supply is for consideration being the sale price of $<amount> and the supply is connected with the indirect tax zone as the property is located in Australia. We will now consider whether the sale of the Property is in the course or furtherance of an enterprise that you carried on and, if so, whether you are required to be registered for GST. | Detailed Reasoning - Enterprise: The term 'enterprise' is defined for GST purposes in section 9-20 and includes, among other things, an activity or series of activities done: • in the form of a business (paragraph 9-20(1)(a)) or • in the form of an adventure or concern in the nature of trade (paragraph 9-20(1)(b)) • on a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property (paragraph 9-20(1)(c)). The phrase 'carrying on' an enterprise is defined in section 195-1 to include doing anything in the course of the commencement or termination of the enterprise. This definition ensures that activities done in the course of the commencement or termination of the enterprise are included in determining whether the activities of the entity amount to an 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) contains the Commissioner's view on what constitutes an enterprise for the purpose of eligibility for an Australian business number. Goods and Services Tax Determination GSTD 2006/6 Goods and services tax: does MT 2006/1 have equal application to the meaning of 'entity' and 'enterprise' for the purposes of the A New Tax System (Goods and Services Tax) Act 1999 extends the application of MT 2006/1 to the GST Act . The principles in MT 2006/1 apply equally to the term 'enterprise' and can be relied upon for GST purposes. | Detailed Reasoning - In the form of a business: Paragraphs 177 to 179 of MT 2006/1 discuss the main indicators of carrying on a business, and state: Indicators of a business 177. To determine whether an activity, or series of activities, amounts to a business, the activity needs to be considered against the indicators of a business established by case law. 178. TR 97/11 discusses the main indicators of carrying on a business. Based on that discussion some indicators are: • 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. 179. There is no single test to determine whether a business is being carried on. Paragraph 12 of TR 97/11 states that 'whilst each case might turn on its own particular facts, the determination of the question is generally the result of a process of weighing all the relevant indicators'. TR 97/11 can be referred to for a fuller discussion on whether a particular activity constitutes the carrying on of a business. Based on the facts of this case, we consider your activities relating to the demolition, construction of the new residential premises, and the marketing and sale of the Property do not reflect the indicators of a 'business' as listed above. The indicators set out in paragraph 178 MT 2006/1 are not present to a sufficient degree to warrant the conclusion that you are carrying on an enterprise in the form of a business pursuant to paragraph 9-20(1)(a). We will now consider whether your activities are in the form of an adventure or concern in the nature of trade (paragraph 9-20(1)(b)). | Detailed Reasoning - In the form of an adventure or concern in the nature of trade: Paragraph 244 of MT 2006/1 explains that 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 and other private assets are not, in the absence of other factors, adventures or concerns in the nature of trade. Paragraph 245 of MT 2006/1 refers to 'the badges of trade' which provides a 'common sense guidance' in reaching a conclusion on whether a transaction has the characteristics of a business deal and whether an asset is a trading/revenue asset or a capital/investment asset held for either investment or personal enjoyment. While an activity such as the selling of an asset may not of itself amount to an enterprise, account should be taken of the other activities leading up to the sale to determine if an enterprise is carried on. The Commissioner's view on the badges of trade in MT 2006/1 includes: | Detailed Reasoning - The subject matter of realisation: 247. This badge of trade considers the form and the quantity of property acquired. If the property provides either an income or personal enjoyment to the owner it is more likely to be an investment than a trading asset. | Detailed Reasoning - The length of period of ownership: 249. A trading asset is generally dealt with or traded within a short time after acquisition. The frequency or number of similar transactions 251. The greater the frequency of similar transactions the greater the likelihood of trade. | Detailed Reasoning - Supplementary work on or in connection with the property realised: 252. Improving property beyond preparing an asset for sale, to bring it into a more marketable condition and gain a better price suggests an element of trade. | Detailed Reasoning - The circumstances that were responsible for the realisation: 253. Trade involves operations of a commercial character. As assets can be sold for reasons other than trade, the circumstances behind the sale need to be considered. For example, a quick resale may have occurred as a result of sudden financial difficulties. | Detailed Reasoning - Motive: 254. If the activities on an objective assessment have the characteristics of trade, the person's motive is not relevant. It is relevant in those cases where the evidence is not conclusive. An intention to resell at the time of acquisition may be an indicator of the resale being an adventure or concern in the nature of trade. 255. Motive is also important in cases if there is a change in character of the asset. For example, a trading asset becoming an investment asset when the person decides to keep the asset, either for income producing purposes or personal enjoyment Paragraph 258 to 261 of MT 2006/1 further considers the character of an asset and distinguishes between trade/revenue assets and capital/investment assets as follows: | Detailed Reasoning - Trade v. investment assets: 258. United Kingdom cases categorise assets as either trading assets or 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. 259. Examples of investment assets are rental properties, business plant and machinery, the family home, family cars and other private assets. The mere disposal of investment assets does not amount to trade. 260. Assets can change their character but cannot have a dual character at the same time. 261. Investment assets such as business plant and machinery are used by entities in carrying on a business. The purchase and disposal of those types of assets is ordinarily considered not to be an adventure or concern in the nature of trade for UK income tax purposes. Paragraph 262 of MT 2006/1 acknowledges that the question of whether an entity is carrying on an enterprise often arises where there are 'one-offs' or isolated real property transactions. Paragraph 263 continues, stating that the issue to be decided is whether the activities being conducted are an enterprise in that they are of a revenue nature as they are considered to be activities of carrying on a business or an adventure or concern in the nature of trade (profit making undertaking or scheme) as opposed to the mere realisation of a capital asset. Paragraphs 266 and 267 of MT 2006/1 provide that there may be other relevant factors outside this list that need to be weighed up in reaching an overall conclusion and that no individual factor is determinative to the question of whether an enterprise is present: 266. In determining whether activities relating to isolated transactions are an enterprise or are the mere realisation of a capital asset, it is necessary to examine the facts and circumstances of each particular case. This may require a consideration of the factors outlined above, however there may also be other relevant factors that need to be weighed up as part of the process of reaching an overall conclusion. No single factor will be determinative rather it will be a combination of factors that will lead to a conclusion as to the character of the activities. 267. No two cases are likely to be exactly the same. For instance, while the conclusions reached in the Statham and Casimaty cases were similar, different facts and factors were considered to reach the respective conclusions. In this case, you purchased the Property in <year> as a long-term capital investment with the intention to demolish the existing dwelling and to construct a new luxury residence that could be leased at premium rates. The purpose of constructing the new residence was to create a profit-yielding asset, rather than to improve the Property merely to prepare it for sale or to enhance its marketability for the purpose of achieving a higher sale price. Accordingly, you treated and accounted for the Property as a capital asset rather than as trading stock. It was intended that the income stream generated from leasing the Property would ultimately support <two individuals> in their retirement via trust distributions to the respective Unitholders. You provided contemporaneous email communications to support your initial intention to lease the Property. Further, in the lead-up to completion of the new residence, you consulted with leasing agents regarding rental marketing strategies and anticipated rental returns, and you also obtained a formal rental appraisal for the Property in <month/year>. These actions support your contention that the Property was intended to be held as a long-term income-producing asset up until completion of the new residence in <month/year>, notwithstanding the subsequent decision to sell the Property. You held the Property for a considerable period, being approximately <number> years from <month/year> to <month/year>, with the intention of leasing it as a long-term, income-producing investment. However, you did not derive any rental income from the Property prior to its sale. Your decision to sell the Property arose from adverse and unforeseen circumstances, including significant delays in obtaining development approval and substantial increases in construction costs following the COVID-19 pandemic. As a result, the projected maximum weekly rent of approximately $<amount> would have generated an unacceptably low rental yield on your total capital investment of $<amount>. This projected return was below the level you originally expected to achieve from leasing the Property. In light of these changed economic conditions, you decided to dispose of the Property in order to recoup the Unitholders' capital contributions and return those funds for reinvestment in more commercially viable opportunities. The disposal of the Property therefore reflects the abandonment of your original intention to lease the Property due to unforeseen economic circumstances, rather than a decision made in the course of property development or trading activities. Aside from the purchase and construction of the new residence on the Property, you have not undertaken any other property development activities. You do not intend to carry out any further activities through this unit trust and currently plan to wind up the trust following settlement of the Property. On balance, having considered the facts of the case against the badges of trade and other factors listed above, we consider the activities you have undertaken in demolishing the existing dwelling, constructing the new residence for lease, marketing and subsequently selling the property without leasing, does not amount to an enterprise in the form of an adventure or concern in the nature of trade pursuant to paragraph 9-20(1)(b). The Property was acquired and developed with the intention of being held as a long-term income-producing investment, and the later decision to dispose of the property represents the abandonment of that intention and the mere realisation of a capital asset. We will now consider whether your activities are done on a regular or continuous basis, in the form of a lease, license or other grant of an interest in the property paragraph 9-20(1)(c)). | Detailed Reasoning - On a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property: Paragraphs 303 to 322 of MT 2006/1 discuss activities done on a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property. Goods and Services Tax Determination GSTD 2000/9 Goods and services tax: if you let out residential premises do you need to get an ABN for PAYG purposes or register for GST? (GSTD 2000/9) explains at paragraph 7 that the letting of a property is an activity in the nature of a lease, licence or other grant of an interest in property. If it is done on a regular and continuous basis, the activity will meet the definition of enterprise. The leasing of a property whether commercial or residential, will fall within the scope of an 'enterprise' for GST purposes. This is the case regardless of the fact that proceeds generated from the rental of residential premises are input taxed. Furthermore, the activities associated with the commencement or termination of a leasing enterprise will also fall within the scope of an enterprise for GST purposes. In this case, you acquired the Property with the intention of holding it as a long-term, income-producing asset and deriving rental income on an ongoing and regular basis. The demolition of the existing dwelling and the construction of a new residence were undertaken for the sole purpose of enabling the Property to be leased. Although you constructed a new residence, consulted with a leasing agent who provided advertising and rental marketing strategies, and obtained rental appraisals, you ultimately determined that the anticipated rental yield was unacceptably low and materially below the return originally expected from leasing the Property. Due to unforeseen development delays and the prevailing economic conditions, you decided to market and sell the Property after its construction was completed. We consider that these activities were undertaken in the course of commencing and subsequently terminating your leasing enterprise. Accordingly, notwithstanding that the enterprise did not ultimately eventuate, the activities fall within the scope of an enterprise pursuant to paragraph 9-20(1)(c). We now consider whether you are required to be registered for GST. | Detailed Reasoning - GST registration: Section 23-5 states that you are required to be registered for GST if: (a) you are carrying on an enterprise; and (b) your *GST turnover threshold turnover meets the *registration turnover threshold. The current registration turnover threshold for entities other than non-profit bodies is $75,000 pursuant to Regulation 23 15.01 of the A New Tax System (Goods and Services Tax) Regulations 2019 . As discussed above, your activities fall within the scope of 'carrying on an enterprise', thus satisfying paragraph 23-5(a) above. The next issue to consider is whether your GST turnover meets the registration turnover threshold of $75,000 or more. | Detailed Reasoning - GST turnover: 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. '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. '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. Paragraphs 188-15(1)(a) and 188-20(1)(a) provide that input taxed supplies are disregarded when calculating your current and projected turnovers respectively. The supply of residential premises by way of lease, hire or licence is an input taxed supply pursuant to section 40-35 of the GST Act (i.e. being a supply of residential premises that are neither commercial residential premises (hotel, motel, etc.) nor accommodation in commercial residential premises) and is not included in the calculation of your 'current GST turnover' or your 'projected GST turnover'. Whilst you carried on activities in the commencement of your leasing enterprise you did not generate any ongoing income from the leasing enterprise as it did not eventuate. Your only source of income was derived from the sale of the Property comprising of new residential premises. We now consider whether the proceeds from the sale of the Property are included in the calculation of your projected GST turnover for the purposes of determining if you are required to be registered for GST under section 23-5. In your case, 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) further explains the meaning of 'capital assets' 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. As determined above, the Property was acquired and developed with the intention of being held as a long-term income-producing investment, and the later decision to dispose of the property represents the abandonment of that intention and the mere realisation of a capital asset. Although a profit may arise as a result of selling the Property we consider that the sale of the Property will constitute the transfer of a capital asset for the purposes of section 188-25. Accordingly, the proceeds from the sale are excluded from the calculation of your projected GST turnover. Therefore, in weighing up all the relevant facts of this case, we consider that your projected GST turnover is below $75,000 and under section 23-5 you are not required to be registered for GST in relation to the sale of the Property. | Detailed Reasoning - Conclusion: The sale of the Property is not a taxable supply as all the elements of section 9-5 have not been satisfied. Please note that where you, your Unitholders or associates conduct similar activities in the future, the outcome may differ depending on the facts and overall impression at the time. | Detailed Reasoning - Question 2: Are you eligible to apply the margin scheme under Division 75 of the GST Act to your supply of the Property? | Summary: No, you are not eligible to apply the margin scheme under Division 75 as the sale of the Property is not a taxable supply as determined in question 1 above. | Detailed Reasoning - Detailed reasoning: Division 75 allows an entity to calculate the GST payable on the supply of real property under the margin scheme where the relevant requirements are met. Subsection 75-5(1) states: (1) The margin scheme applies in working out the amount of GST on a taxable supply of real property that you make by: (a) selling a freehold interest in land; or (b) selling a stratum unit; or (c) granting or selling a long-term lease; if you and the recipient of the supply have agreed in writing that the margin scheme is to apply. Subsection 75-5(1A) provides that the written agreement must be made on or before making the supply or within such further period as the Commissioner allows. However, subsection 75-5(2) provides that the margin scheme does not apply if the entity acquired the entire freehold interest, stratum unit or long-term lease through a supply that was ineligible for the margin scheme. Subsection 75-5(3) lists the circumstances which make a supply ineligible for the margin scheme. As the supply of the Property is not a taxable supply for the purposes of section 9-5 of the GST Act, no GST is payable on the sale. The margin scheme in Division 75 applies only to taxable supplies of real property and merely provides an alternative method of calculating GST otherwise payable. Accordingly, in this case, as no GST liability arises in respect of the sale, the margin scheme cannot apply.

It would cost approximately $<amount> to demolish the existing dwelling and construct a new luxury residence; and | The new luxury residence would be completed and ready to be leased by the end of <month/year>.