Private ruling: Goods and services tax and residential premises
Date of advice: 14 January 2021
Published: March 2021
Ruling period: 1 April 20XX to 30 June 20XX
Date scheme commenced: 1 April 20XX

Ruling: Q1: Did you, as liquidator of Entity A, have a GST liability pursuant to section 58-10(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)in respect of the sale of the Property? | A1: No. The physical characteristics of the Property supplied demonstrate the premises are intended to be and are capable of being occupied as a residence or for residential accommodation. The supply of the vacant house is not a supply of commercial residential premises, nor is it new residential premises. Therefore, the supply of the Property was an input taxed supply pursuant to section 40-65 of the GST Act and no GST is payable on the sale of the Property.

Relevant facts and circumstances: The Entity is registered for GST. The Entity acquired a property on ddmmyyy. The zoning of the area in which the Property was located is General Residential (GRZ). The property was a standard 3 bedroom house with kitchen, dining, bathroom, loungeroom and home office. In yyyy prior to your purchase it was remodelled to be used as a boarding house following the issue on ddmmyyyy of a building permit to change the use of the Property from a Class 1a dwelling to a Class 1b boarding house. Following reclassification, the property was used as a boarding house. The use of the property as a boarding house ceased from at least mmyyyy. The property has been vacant from at least that date and remained vacant until settlement of the sale. On ddmmyyyy you were appointed as liquidator. You were registered for GST as you requested, on the CAC 002 account. The property became subject to a Building Order (the Order) on ddmmyyyy. The order required: • That the garage cease to be used as a Class 1b boarding house and be reinstated to its original condition and use as a class 10a garage; and • reinstatement of the altered parts of the Class 1b boarding house (dining room and living room) to their previously approved condition and use as a dining room and living room. You arranged for the Order to be complied with and a Building Order Completion notice was issued on ddmmyyyy confirming that the Order had been complied with. Following the renovation, the property is described as containing 3 bedrooms, a living room, dining and meals area, kitchen, bathroom, home office and rumpus room. However, you did not reclassify the building to residential and left the classification as Boarding House Class 1b. During the period of vacancy some electricals and some fixtures were removed from the property by unknown parties. You entered into a contract to sell the property and it settled on ddmmyyyy.

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 40-65 | A New Tax System (Goods and Services Tax) Act 1999 Section 195-1