Private ruling: GST and residential premises
Date of advice: 3 December 2021
Published: March 2022
Ruling period: From the financial year commencing 1 July 19XX to the financial ended 30 June 20XX
Date scheme commenced: 1 July 19XX

Ruling: Q1: Is the sale of the property a sale of input taxed residential premises? | A1: Yes. The property has all the physical characteristics of residential premises. As it was constructed more than five years ago, it is no longer new residential premises. It also does not meet the definition of commercial premises nor is it commercial residential premises. The property zoning lawfully allows use as a residence and you have established via photographic evidence that it is capable of occupation as a residence. The intention of the purchaser is not relevant to the question whether the premises are residential premises.

Relevant facts and circumstances: You are the applicant for this private ruling. You have an ABN and were registered for GST, but you cancelled it a few years ago and since then you have not conducted an enterprise. You inherited real property from your parent. When your parent entered into a contract to purchase the property it was also described at least two different ways, but they all refer to the same property. The property is zoned to allow both business and residences. • Your parent intended to and did purpose build a residence from where your parent could also operate a business. • The residence is approximately 2/3rd of the area of the structure and the commercial kitchen 1/3rd of the available floor space. • Your parent ran a GST registered business from the property until several years ago. Your parent lived at the residence as the principal place of residence until your parent passed away. • From that time you moved into the property and have lived there as your principal place of residence. • You recently entered the contract of sale of the entire property. • You have not used the commercial kitchen portion of the property commercially. • The sale contract over the property indicates the consideration for the supply is $XX but there is no GST in the price. • The property is being sold to a party who intends the kitchen portion to be used in their business.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 40-65.