Private ruling: GST - property
Date of advice: 6 September 2022
Published: November 2022
Ruling period: Financial year ending 30 June 20XX
Date scheme commenced: The date this ruling is issued

Ruling: Q1: Is the sale of the property a taxable supply in accordance with section 9-5 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No. The supply of the property will not be a taxable supply for the purposes of section 9-5 of the GST Act as the sale is the sale of residential premises and, as a result, is an input taxed supply.

Relevant facts and circumstances: The Company sold the property to a purchaser in 20XX. The property consists of approximately X acres. Situated on the property is a residential premises and two large sheds. There is also a part of an orchard situated on the property. The Company sold a larger farm which existed over two titles. Each title was sold separately. The property was the smaller portion of the larger farming enterprise sold. Both sales were treated as taxable supplies by the Company. The purchaser of the property is intending to use it as her principal place of residence. The Company is registered for goods and services tax (GST) reporting its GST obligations on a quarterly basis.

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 subsection 9-30(2) | A New Tax system (Goods and Services Tax) Act 1999 paragraph 40-35(2)(a)

Reasons for decision: Summary: Under section 9-5 of the GST Act, and entity makes a taxable supply where the supply: 1. is made for consideration; and 2. is made in the furtherance of an enterprise being carried on; and 3. is connected with the indirect tax zone; and 4. is made by a supplier who is 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. Under subsection 9-30(2) of the GST Act a supply is input taxed if: (a) it is input taxed under Division 40 or under a provision of another Act: or (b) it is a supply of a right to receive a supply that would be input taxed under paragraph (a). Under paragraph 40-35(2)(a) of the GST Act, the supply of residential premises is input taxed to the extent that the premises are to be used predominantly for residential accommodation (regardless of the term of occupancy). In this case, the supply of the property is residential premises situated on a X acre plot of land. The property consists of a residence, sheds and part of an orchard. The purchaser of the property is intending to use the property as their principal place of residence. Based on the facts of this case, the Company, when selling the property, was making an input taxed supply of residential premises and, as a result, the sale of the property is not subject to GST.