Private ruling: GST payable on sale of property
Date of advice: 17 December 2025
Published: 9 February 2026

Ruling: Q1: Was the sale of 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, the sale of the Property was not a taxable supply under section 9-5 of the GST Act and no GST was payable. | Q2: Was there an entitlement to input tax credits (ITCs) for all expenses (acquisitions) incurred in relation to your Liquidation? | A2: No, there was no entitlement to ITCs for all acquisitions incurred in relation to your Liquidation.

Relevant facts and circumstances: You were registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC) and were endorsed for GST concessions. You were not registered for GST nor required to be registered for GST as your GST turnover from undertaking your charitable activities had not met the registration turnover threshold. You acquired a vacant block of land and had residential dwelling (a stand alone house) constructed on the land (Property). You used the Property as part of your charitable activities and never supplied the Property on which the residential premises were constructed by way of lease, hire or licence. A Liquidator was appointed for the purposes of voluntarily winding up the entity. The Property was sold at arm's length through public auction. The contract for the sale of the Property (Contract) shows you in Liquidation as the vendor, the purchase price and that no GST was payable. The value of supplies made by you other than the supply of Property did not meet the registration turnover threshold.

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 9-25 | A New Tax System (Goods and Services Tax) Act 1999 section 11-5 | A New Tax System (Goods and Services Tax) Act 1999 section 11-20 | A New Tax System (Goods and Services Tax) Act 1999 section 23-5 | A New Tax System (Goods and Services Tax) Act 1999 section 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 40-75 | A New Tax System (Goods and Services Tax) Act 1999 section 58-5 | 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 section 23-15.01 | A New Tax System (Goods and Services Tax) Regulations 2019 section 23-15.02

Reasons for decision: Summary: GST is payable on any taxable supply that you make. Section 9-5 of the GST Act provides that 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. For there to be a taxable supply, all of the requirements of section 9-5 of the GST Act must be satisfied. The Property was sold as part of the voluntary winding up of the entity. Division 58 of the GST Act applies to representatives of incapacitated entities. A 'representative' is defined under section 195-1 of the GST Act to include a liquidator. An 'incapacitated entity' is defined under section 195-1 of the GST Act to mean one of the following: (a) an individual who is a bankrupt; or (b) an entity that is in liquidation or receivership; or (c) an entity that has a representative. Subject to Division 58 of the GST Act, any supply (in this case, the sale of the Property), acquisition or importation by an entity (Liquidator) in the capacity of a representative of another entity that is an incapacitated entity (you) is taken to be a supply, acquisition or importation by the other entity (you) (subsection 58-5(1) of the GST Act). Therefore, the sale of the Property by the Liquidator as your representative is taken to be a supply by you. Before considering whether the requirements under paragraph 9-5 of the GST Act are satisfied, we must first determine whether the sale of the Property would otherwise be GST-free under Division 38 of the GST Act, input-taxed under Division 40 of the GST Act as a sale of residential premises or a supply of a new residential premises | Detailed Reasoning - GST-free: On the facts, there is no indication that the supply of the Property met the requirements of a GST-free provision set out in Division 38 of the GST Act. | Detailed Reasoning - Input taxed supply: Under section 40-65 of the GST Act, the sale of residential premises is input taxed to the extent that the Property is residential premises to be used predominantly for residential accommodation (regardless of the term of occupation). However, the sale is not input taxed to the extent that the residential premises are: (a) commercial residential premises; or (b) new residential premises other than those used for residential accommodation (regardless of the term of occupation) before 2 December 1998. | Detailed Reasoning - Residential premises: 'Residential premises' is defined under section 195-1 of the GST Act to mean land or a building that: (a) is occupied as a residence or for residential accommodation; or (b) is intended to be occupied, and is capable of being occupied, as a residence or for residential accommodation. (regardless of the term of the occupation or intended occupation) and includes a floating home. Goods and Services Tax Ruling GSTR 2012/5 Goods and services tax: residential premises (GSTR 2012/5)provides guidance on whether a premises is considered a residential premises. Paragraphs 9, 10 and 15 of GSTR 2012/5 highlight a single test that looks to the physical characteristics of the property to determine the premises suitability and capability for residential accommodation. Relevantly, paragraph 10 of GSTR 2012/5 explains that premises that display physical characteristics evidencing their suitability and capability to provide residential accommodation are residential premises even if they are used for a purpose other than to provide residential accommodation (for example, where the premises are used as a business office). The Property displays physical characteristics evidencing its suitability and capability to provide residential accommodation as it can provide shelter and includes basic living facilities. As such, the Property comes within the definition of residential premises to be used predominantly for residential accommodation. We must now consider whether the Property constitutes a new residential premises. | Detailed Reasoning - New Residential premises: Under subsection 40-75(1) of the GST Act residential premises are new 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; (b) have been created through substantial renovation 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 40-75(1)(b) and (c) have effect subject to paragraph 40-75(1)(a) of the GST Act. However, residential premises are not new residential premises if, for a the period of at least 5 years since: if paragraph (1)(a) applies (and neither paragraph 1(b) nor paragraph 1(c) applies the premises first became residential premises the premises have only been used for making supplies that are input taxed because of paragraph 40-35(1)(a) of the GST Act. Goods and Services Tax Ruling GSTR 2003/3 Goods and services tax: when is a sale of real property a sale of new residential premises? considers when real property is new residential premises pursuant to section 40-75 of the GST Act. Paragraph 90 of GSTR 2003/3 indicates that subsection 40-75(2) of the GST Act requires that for the period of at least 5 years the premises have been used only for making input taxed supplies under paragraph 40-35(1)(a) of the GST Act. This requirement in subsection 40-75(2) is satisfied where the only supplies of the premises were by way of lease, hire or licence (i.e. residential rental) for any continuous period of at least 5 years between when the premises would otherwise have become new residential premises and when they are sold. The Property has not been leased, hired or licenced at any time prior to the sale. Accordingly, the sale of the Property is the sale of a new residential premises as it has not previously been sold as a residential premisses and has not been the subject of a long-term lease. The following considers each of the requirements of section 9-5 of the GST Act in relation to the sale of the Property. | Detailed Reasoning - Supply made for consideration in the indirect tax zone: With regards to paragraph 9-5(a) and (c) of the GST Act, you as represented by the Liquidator, made a supply (being the sale of the Property) for consideration (being the contract price) and the Property is connected with the indirect tax zone (being Property located in Australia) satisfying paragraphs 9-5(a) and (c) of the GST Act. | Detailed Reasoning - In the course of an enterprise: With regards to paragraph 9-5(b) of the GST Act, subsection 9-20(1) of the GST Act defines an enterprise to include, amongst other things, activities or series of activities done by a charity. The term 'carrying on' includes doing anything in the course of the commencement or termination of that enterprise (section 195-1 of the GST Act). The activities undertaken by you as a charity come within the definition of an enterprise. Selling the Property used by you in your charitable enterprise as part of the process of winding up comes within the meaning of something done in the termination of that enterprise. In the context of winding up, the enterprise being carried on for GST purposes is your enterprise, not the Liquidator's own enterprise. Selling the Property, is part of carrying on your enterprise, notwithstanding you are terminating that enterprise in winding up. On that basis, the requirement of paragraph 9-5(b) of the GST Act was satisfied. | Detailed Reasoning - Registration for GST: With regards to paragraph 9-5(d) of the GST Act, the issue here is whether you, and the Liquidator as your representative, was required to be registered for GST as you were not registered for GST. Section 23-5 of the GST Act provides that you are required to be registered for GST if: (a) you are carrying on an enterprise; and (b) your GST turnover meets the registration turnover threshold. The registration turnover threshold is currently set at $75,000 for suppliers other than non-profit bodies and $150,000 for suppliers that are non-profit bodies. Under subsection 188-10(1) of the GST Act, you meet a particular turnover threshold if: (a) your current GST turnover is at or above the turnover threshold, and the Commissioner is not satisfied that your projected GST turnover is below the turnover threshold; or (b) your projected GST turnover is at or above the turnover threshold. Section 188-15 of the GST Act defines 'current GST turnover' as the sum of the values of all of the supplies your made, or are likely to be make, in a particular month and the preceding 11 months. Section 188-20 of the GST Act defines 'projected GST turnover' as the sum of the values of all of the supplies made, or are likely to be made, in a particular month and the next 11 months. Paragraphs 188-15(1)(a) and 188-20(1)(a) of the GST Act provide that input taxed supplies are not taken into account when calculating your current and projected turnovers respectively. As discussed above, the sale of the Property was not an input taxed supply as it is a supply of a new residential premises. Section 188-25 of the GST Act modifies the effect of section 188-20 of the GST Act by disregarding 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. Accordingly, your projected GST turnover does not include supplies that fall under either paragraph 188-25(a) or paragraph 188-25(b) of the GST Act. Your supply does not need to satisfy both paragraphs to be disregarded from your calculation of your projected GST turnover. 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) gives guidance on how section 188-25 of the GST Act affects the calculation of projected GST turnover. The GST Act does not define the term 'solely as a consequence of'. Paragraph 41 of GSTR 2001/7 explains that: 41. For the purposes of section 188-25 a supply is made, or is likely to be made, A New Tax System (Goods and Services Tax) Act 1999 section 188-15 solely as a consequence' where the supply is made only as a result of the ceasing of an enterprise (see example 1 of this Ruling), or the substantial and permanent reduction in size or scale of an enterprise (see example 2 of this Ruling). The Property was sold solely as a consequence of ceasing to carry on your enterprise due to the voluntary winding up of the company by the Liquidator as your representative. Therefore, this supply is disregarded from calculating your projected GST turnover as a result of subparagraph 188-25(b)(i) of the GST Act. Therefore, your projected GST turnover did not meet the registration turnover threshold once the supply of the Property, made as a consequence of ceasing to carry on your enterprise, was disregarded. Although your current GST turnover did meet the registration turnover threshold (as it included the value of the supply of the Property), your projected GST turnover was below the turnover threshold. Therefore, your GST turnover did not meet the registration turnover threshold. Therefore, as you were not registered for GST, and your GST turnover did not meet the registration turnover threshold requiring you to be registered for GST, the requirement under paragraph 9-5(d) of the GST Act is not satisfied. | Detailed Reasoning - Conclusion: As you and consequently the Liquidator were not registered or required to be registered for GST when the Property was sold at auction one of the essential requirements of a taxable supply under section 9-5 of the GST Act was not satisfied and as such the sale of the Property was not a taxable supply on which GST was payable. | Detailed Reasoning - Question 2: Under section 11-20 of the GST Act you are entitled to the ITCs for any creditable acquisition that you make. Section 11-5 of the GST Act provides that you make a creditable acquisition if: (a) you acquire anything solely or partly for a creditable purpose; and (b) the supply of the thing to you is a taxable supply; and (c) you provide, or are liable to provide, consideration for the supply; and (d) you are registered or required to be registered for GST. You are not registered for GST. As concluded under question 1, you are also not required to be registered for GST. You are not entitled to ITCs if you are not registered or required to be registered for GST. | Detailed Reasoning - Conclusion: As you and consequently the Liquidator were not registered or required to be registered for GST, acquisitions made in relation to your liquidation were not creditable acquisitions giving rise to an entitlement to an ITC.