Private ruling: GST and the sale of real property
Date of advice: 24 October 2017
Published: March 2018

Ruling: Q1: Will your sale of the property be the sale of residential premises that is input taxed under section 40-65 of the A New Tax System (Goods and Services Tax) Act 1999 ? | A1: Yes. The Property has sustained fire damage. However, with the bulk of the damage being limited to the extension, the fire damage does not prevent the Property from being capable of occupation as a residential premises. Rather, the damage should be seen as having brought the extension into a minor state of disrepair. Accordingly, your supply of the property will be the sale of residential premises that is input taxed under section 40-65 of the A New Tax System (Goods and Services Tax) Act 1999.

Relevant facts and circumstances: You, as trustee for the Trust, own the property. You, the Trust are registered for GST. On DDMMYYYY you executed a contract of sale for the Property. Settlement is intended to occur on DDMMYYYY. The Property is approximately xx years old with an extension that is approximately xx years old. It has: ● x Bedrooms ● x Kitchens ● x Bathrooms ● x Laundry ● x Living Areas ● Other facilities ● Parking for approximately x cars The Property is connected to: ● Electricity; ● Gas; ● Water; ● Sewerage; and ● Telephone Services On DDMMYYYY a fire occurred in a corner of the rear extension of the Property. The fire spread throughout the extension causing damage to the ceiling cavity space and structural damage to the roof trusses and timber stud walls predominantly in one corner. The fire also damaged the masonry walls and an area of floor tiles. On DDMMYYYY the residents vacated the Property and it has not been occupied since. You obtained a dilapidation inspection report and an engineering investigation report, both of which concluded that there was minimal damage to the main residence due to the fire. The Property has at various times been used and occupied as a residence. The Property has not in the previous five years been: ● created through substantial renovations; ● constructed to replace a demolished premises on the land; ● sold as anything other than a residential premises. Supporting Documentation In support of your private ruling application, you provided various documents.

Relevant legislative provisions: 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


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