Private ruling: GST and the sale of residential property
Published: June 2012

Ruling: Q1: Will the sale of the x/x share of the residential property by the executors of the deceased estate, be subject to GST? | A1: No, the sale of the x/x share of the residential property by the executors of the deceased estate will not be subject to GST | Q2: Will the sale of the x/x share of the residential property, be subject to GST. | A2: No, the sale of the x/x share of the residential property, will not be subject to GST

Relevant facts and circumstances: You are the executor for the estate. The deceased was not registered for GST at the time of death, nor is the Estate registered for GST. The deceased estate consists of money and a x/x share of a residential property located in Australia (the property). The property has always been used as a private residence with no business application. The residential house has been on the site since it was purchased by your family, you believe the house was built in on a specified date. The property was the deceased principal place of residence at the time of death. You in your own right own a x/x share in the property, which you purchased on a specified date. You and the deceased estate own the property as tenants in common. You, with the consent of the estate, allowed family members to reside in the property rent free until the sale. The property was sold on a specified 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 40-65

Reasons for decision: Summary: The sale of the property located in Australia will be subject to GST if it is a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). Section 9-5 of the GST Act provides that you make a taxable supply if: · you make a supply for consideration · the supply is made in the course or furtherance of an enterprise that you carry on · the supply is connected with Australia and · you are registered, or required to be registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. You have informed us that the deceased used the property as their private residence until their death. The property then continued to be used as residential premises until it was sold. There are no provisions in the GST Act that would make the sale of residential premises GST-free. However, under section 40-65 of the GST Act, the sale of residential premises is input taxed, which means no GST is applicable. The exception is where the premises are considered to be commercial residential premises or new residential premises. (New residential premises are premises that have not been previously sold or subject to a long term lease). Based on the facts provided, the property is not a commercial residential premises or new residential premises. Therefore, the sale of the property is an input taxed supply of residential premises as provided under section 40-65 of the GST Act, and GST is not included on the sale of the property.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.