Private ruling: GST - sale of property
Date of advice: 11 February 2026
Published: 30 March 2026
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you required to be registered for GST under section 23-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No. | Q2: Will the sales of xxxx (Property A) and xxxx (Property B) (collectively, the Properties) be supplies that are disregarded under section 188-25 of the GST Act when calculating your projected GST turnover? | A2: The sale of Property A will be a supply made by way of transfer of a capital asset and will therefore be disregarded under section 188-25 when calculating your projected GST turnover. The sale of Property B will not be made in the course or furtherance of an enterprise that you carry on. It will therefore be excluded under paragraph 188-20(1)(c) when calculating your projected GST turnover.

Relevant facts and circumstances: You are not registered for GST. You are selling the following properties: 1. xxxx (Property A) 2. xxxx (Property B) (collectively, the Properties). The Properties are the only properties which you hold ownership over. Property A The property contains 20 residential units, a separate residential house (the residence) and a lake. The property was acquired with the intention of letting it out for residential purposes. The residence consists of 4 bedrooms, a bathroom, and a separate toilet, as well as a kitchen and a dining room. Each of the 20 units include a bedroom, bathroom, and a designated laundry area, with plumbing and water fixtures installed. There is no washing machine installed. The units are not currently suitable for immediate occupation and require refurbishment. There is an empty building by the lake, but it is in poor condition, and you are unaware of its original purpose. The property is not managed by any staff member or management company. There are no reception area, shared laundry or shared kitchen facilities. The property has been largely untenanted since purchase. Throughout your ownership, the residential units were leased to a single entity for a period of 12 months. You did not provide any services to the occupants during this period. The lease provided the lessee access to the whole grounds including both the residence and the 20 units. The lessee leased the property with the intention to use the property for short-term rentals. The lessee tried for the year and decided not to continue with their plan due to several factors: • Remote location: the property is situated in a remote area, which significantly reduces rental demand compared to metropolitan locations • Impact of COVID-19 The property is intended to be sold with vacant possession. The property is in Special Use Zone Schedule 2. You have entered into a Contract of Sale to sell the property. The Contract of Sale specifies that the price does not include GST. Property B The property consisted of a large residential dwelling with additional land, including a tennis court. Shortly after acquisition, you demolished the residential dwelling, and the property was turned into vacant land. The purpose of the demolition was to clear the site to construct a new, purpose-built main residence (a "dream home") for the family. However, the proposed development was delayed because the family decided to redirect their effort and provide funding to various businesses. The development plan was also impacted by the outbreak of COVID-19. You are selling the property as vacant land to a related-party individual, with no building permit yet obtained. The supply of the property will be made for consideration at market rate. The purchaser of the property is not registered nor required to be registered for GST. The purchaser is acquiring the property to build a main residence. The property is in General Residential Zone Schedule 8. Enterprise The Properties were not acquired with the intention of purchasing, developing and then selling as new residential dwellings. You also receive passive income in the form of trust distributions and dividend income.

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: 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 Properties with the intention of making a profit from their sale. As well as this, you have held Property B for over 11 years and Property A for 9 years. | Detailed Reasoning - Property A: You are operating a leasing enterprise with respect to Property A. You purchased the property with the intention of leasing the premises and leased it for one year during the time of ownership. Therefore, the sale of Property A will be made in the course or furtherance of your leasing enterprise. | Detailed Reasoning - Property B: Property B was acquired and held by you as a capital asset with the intention of constructing a new, purpose-built main residence for the family. It has never been used in income producing activities and the reason to dispose of the vacant land is to allow a related-party individual to develop their family home on the land. Lastly, the only significant works carried out was the demolition of the dwelling and tennis court at Property B, which is now being sold as vacant land. While the meaning of 'in the course or furtherance' is meant to be taken as a broad range to cover any supplies made in connection with your enterprise, the sale of Property B will not be made in the course or furtherance of any enterprise you carry on, as it is the sale of a private asset. | 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: • 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. As discussed above, the sale of Property B 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 B will be excluded when calculating your projected GST turnover. Property A was used as a leasing asset and was not acquired with the intention of resale at a profit. Accordingly, it is a capital asset as opposed to a revenue asset. Considering the relevant facts of this case, the sale of Property A constitutes the transfer of a capital asset for the purposes of section 188-25 and should be disregarded when calculating your projected GST turnover. Consequently, your GST turnover does not meet the $75,000 registration turnover threshold. Therefore, you are not required to be registered under section 23-5 of the GST Act. This is because the sale of Property B will not be made in the course or furtherance of any enterprise that you carry on and the sale of Property A Property will be the transfer of a capital asset that was used in your leasing enterprise.