Private ruling: GST and sale of real property
Published: July 2014

Ruling: Q1: Are you required to be registered for GST? | A1: No. You are not required to be registered under section 23-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) because you are not carrying on an enterprise. The sale of the Property is the mere realisation of a private asset. | Q2: Is the sale of the Property a taxable supply? | A2: No. You are not making a taxable supply under section 9-5 of the GST Act because the sale of the Property is not made in the course or furtherance of an enterprise that you carry on and you are neither registered nor required to be registered for GST.

Relevant facts and circumstances: You are now retired and do not carry on any business or enterprise. Prior to retirement, you were self-employed. You have owned the Property since 19XX. It comprises a number of separately titled parcels of land. Located on approximately an acre of one parcel of land is a large family residence which was your principal place of residence until 20AA when you moved from the Property to a smaller residence due to your advancing years and no longer being able to look after a large block of land. The remaining land surrounding the principal place of residence and the other parcels of land are vacant and are not used for any business or enterprise activities. You were registered for GST carrying on a farming enterprise at the Property from 1 July 2000 to 30 June 20BB. From 1 July 20BB, you have solely used the Property as your principal place of residence. In 20CC, you received a letter from the ATO advising that the Commissioner of Taxation (the Commissioner) had made the decision to cancel your ABN registration with effect from 1 July 20BB on the basis that you were not carrying on an enterprise. On Month 20DD, you entered into a Contract of Sale for the sale of the Property to the Purchaser for $YYY. Settlement of the sale of the Property is due in 20EE. During the period between the contract date and the settlement date, the Purchaser proposes to obtain access to the site in accordance with the Contract of Sale to undertake very minor activities. The Contact of Sale is not conditional on the Purchaser obtaining planning approval or planning permits prior to the settlement date.

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.