Private ruling: GST and sale of residential premises
Date of advice: 25 March 2019
Published: May 2019
Ruling period: 1 July 2018 to 30 June 2019
Date scheme commenced: 1 January 2019

Ruling: Q1: Is the supply by the Vendor of the residential premises (the Property) subject to GST? Answer No, the supply of the Property is not subject to GST. As the supply consists of residential premises to be used predominately for residential accommodation it is treated as an input taxed supply. As such GST does not apply to the sale.

Relevant facts and circumstances: In 2016 the Vendor purchased a property which consisted of residential premises (the Property). The Property is located in an area zoned as a “General Residential Zone”. The Property is a residential premise (house) with three bedrooms, bathroom, separate toilet, kitchen, laundry, living room and dining room. There is also a garage located on the Property. The Property was originally built in the 1960s and has not been redeveloped or substantially renovated since its construction. The Property was purchased by the Vendor as an investment property and has been leased to tenants since its purchase in 2016 up till 2018. In 2018 the Vendor obtained a subdivision permit to build two units on the Property, however the existing house and garage was never demolished and the construction of the two units never proceeded. The Vendor) has entered into a contract with a Purchaser in 2019 for the sale of the Property (Contract of Sale). The consideration payable by the Purchaser under the Contract of Sale is an amount of $X. Settlement date under the Contract of sale is late 2019.

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 40-65.