Private ruling: GST and sale of real property
Published: August 2017

Ruling: Q1: Is the sale of the Property a taxable supply pursuant to section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No. For the sale to be a taxable supply all the requirements of section 9-5 of the GST Act must be satisfied. The sale satisfies the requirements of paragraphs 9-5(a), 9-5(b) and 9-5(c) of the GST Act as follows: The sale is made for consideration The sale is made in the course of the leasing enterprise that you are carrying on and The sale is connected with the indirect tax zone because the Property is in Australia. However, the requirement of paragraph 9-5(d) of the GST Act is not satisfied because you are not registered. Furthermore, you are not required to be registered for GST because you do not meet the registration turnover threshold. The sale of the Property is excluded when calculating your projected GST turnover. Therefore, as not all the requirements of section 9-5 of the GST Act are met, the sale of the Property is not a taxable supply.

Relevant facts and circumstances: You are in the process of selling the Property. The Property is zoned commercial and contains a shed with a work bench on it and an amenities block. You expect the selling price of the Property to be over $75,000. Since you have held the Property it had been leased. In the last financial year, the gross rent is less than $75,000. The leasing of the Property is your only activity. Your other income is a small amount of bank interest. You are not registered for GST.

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 23-5. | A New Tax System (Goods and Services Tax) Act 1999 section 188-5. | 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.