Private ruling: GST and registration
Date of advice: 22 October 2018
Published: January 2019

Ruling: Q1: 1. Are you deemed to be carrying on an enterprise in your property transaction referred to in the circumstances set out in this private ruling? 2. If this private ruling deems that you do not have to be registered for GST in the circumstances set out in this private ruling, are you able to cancel your GST registration given that you had registered only because of the circumstances in this private ruling? | A1: 1. No, you are not considered to be carrying on an enterprise in the circumstances set out in this private ruling as your sale of your property is considered to be the realisation of an investment asset. 2. Yes, given the answer to Question 1 above, you will need to apply for cancellation of your GST registration. For further information, please refer to refer to the information under the topic of Cancelling your GST registration in the ATO’s website: www.ato.gov.au

Relevant facts and circumstances: ● You purchased a block of land ● Your intention was to build and rent a residential duplex out on a long term basis for at least five years to provide for retirement income. ● The construction of the duplex began in XXXX 20XX. ● You subsequently found out half way through the building process from the suburb developer that the lot adjacent to your block was designated for the construction of a six storey commercial building. You considered that this will overshadow your property and for this reason will be detrimental to the value of your property and rental valuations. Therefore, you subsequently formed an intention to sell as soon as possible to minimise your loss because of the six storey building being built. ● Your property is listed for sale. ● At the time of this private ruling construction is nearing completion which is expected to occur on XX XXXX 20XX. ● You voluntarily registered for GST recently. ● As advised, to date, you have not claimed any input tax credits and you have not reported any GST sales. ● You borrowed funds to finance the purchase of the property. ● You have other residential properties which you are renting out.

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 25-50