Private ruling: GST and strata titled residential premises
Date of advice: 3 May 2019
Published: June 2019
Ruling period: 1 May 2019 till 31 December 2021
Date scheme commenced: 1 January 2019

Ruling: Q1: Is the sale of one of the residential properties that has been recently strata tiled, subject to GST? | A1: No. The sale of one of the residential properties that has been recently strata titled is not subject to GST. The sale of an individual residential premise, after a strata title subdivision of a building does not by itself create ‘new residential premises’ for the purposes of subsection 40-75(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). In this case the physical combination of land and building as a residential premise remain basically the same. As such the sale of the recently strata titled premise is not subject to GST.

Relevant facts and circumstances: Entity X (you) purchased an investment property approximately 15 years ago. At the time of purchase the property contained two adjoining residential premises (duplexes) on a single title and each residential premise has been leased by you since purchase. The residential premises where originally constructed in 1990 and have not been developed to create new residential premises. That is, for the purposes of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) the premises are residential premises and are not considered new residential premises. You have recently undergone a strata title subdivision such that each duplex is now on its own title. Other that the strata title subdivision that has taken place the residential premises have remained unchanged. To raise capital you are now considering selling one of the two duplexes. You are not registered for GST.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 9-5