Private ruling: GST-the sale of residential premises
Date of advice: 24 October 2025
Published: 8 December 2025
Ruling period: XX/XX/20XX
Date scheme commenced: XX/XX/20XX

Ruling: Q1: Will you make a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when you sell the property , (the Property)? | A1: No. You will not make a taxable supply under section 9-5 of the GST Act on the sale of the Property as it will be input taxed under section 40-65 of the GST Act. | Q2: If the answer to Question 1 is 'yes', will the sale of the Property be eligible for the margin scheme under section 75-5 of the GST Act? | A2: Not applicable.

Relevant facts and circumstances: You are a registered Australian private company with an active Australian Business Number and GST registration. You acquired the Property by contract in 20XX and settled on 20XX. The Property contains domestic amenities such as bedrooms, bathrooms, and a kitchen. There was no GST liability on acquisition of the Property, and the margin scheme was not applied at that time. The Property is used exclusively for short-stay accommodation. All booking services are managed by an unrelated party. You fully furnished the Property. You pay all expenses associated with the Property. The Property is available to one guest group at a time. There are no staff or management present at the Property while guests are there. You do not offer services such as meals to guests staying in the Property. You have not undertaken any substantial renovations or major developments on the Property since acquisition.

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 40-75 | A New Tax System (Goods and Services Tax) Act 1999 section 75-5 | A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision: Summary: No. You will not make a taxable supply under section 9-5 of the GST Act on the sale of the Property as it will be input taxed under section 40-65 of the GST Act. A supply is a taxable supply under section 9-5 of the GST Act if it satisfies all of the following criteria: • It is made for consideration • It is made in the course or furtherance of an enterprise • It is connected with Australia • The supplier is registered or required to be registered for GST. However, a supply will not be a taxable supply to the extent that it is GST-free or input taxed. Section 40-65 of the GST Act provides that the sale of real property is input taxed if the property is residential premises to be used predominantly for residential accommodation. Residential premises are defined in section 195-1 of the GST Act as land or a building that is occupied, or intended to be occupied, as a residence or for residential accommodation. This definition does not impose a minimum duration of occupation and includes short term stays. The requirement that premises be 'residential premises to be used predominantly for residential accommodation' is discussed in paragraphs 7 and 10 of Goods and Services Tax Ruling GSTR 2012/5 Goods and services tax: residential premises . Whether premises meet this definition is assessed using a test that focuses on their physical characteristics to determine if they are suitable and capable of being used for residential accommodation. The subjective intention of, or actual use by, any particular person is not relevant. The question is whether the premises are suitable and capable of being used for residential accommodation. Premises used for short-stay accommodation may still meet this criterion, provided they offer shelter and basic living facilities consistent with residential use. Your Property contains the necessary features to support residential accommodation, including bedrooms, a kitchen, and amenities for day-to-day living. Accordingly, the Property satisfies the requirement of being residential premises to be used predominantly for residential accommodation under section 40-65 of the GST Act. Certain types of residential premises are excluded from being input taxed under section 40-65 of the GST Act: • Commercial residential premises, such as hotels, motels, hostels, and similar establishments • New residential premises, unless they were used for residential accommodation before 2 December 1998. Commercial residential premises are defined in section 195-1 of the GST Act and further explained in Goods and Services Tax Ruling GSTR 2012/6 Goods and services tax: commercial residential premises (GSTR 2012/6). Paragraph 12 GSTR 2012/6 outlines common characteristics of commercial residential premises, including: • Operation on a commercial basis • Capacity for multiple occupancy by unrelated guests • Holding out to the public • Provision of services and centralised management • Guests having non-exclusive occupancy. The Property does not exhibit these characteristics. It accommodates only one guest group at a time, lacks on site management or reception facilities, and does not offer services such as the provision of meals. The management is outsourced and does not operate in a manner consistent with commercial residential premises. Accordingly, the Property is not commercial residential premises. The conditions for a premises to be new residential premises are under section 40-75 of the GST Act. The Property was built prior to your acquisition, has previously been sold as residential premises, and has not been substantially renovated or redeveloped. Therefore, it does not meet the definition of new residential premises. The sale will be entirely input taxed under section 40-65 of the GST Act as the Property is residential premises to be used predominantly for residential accommodation and is neither new residential premises nor commercial residential premises. Accordingly, the sale of the Property will not be a taxable supply under section 9-5 of the GST Act. | Detailed Reasoning - Question 2: If the answer to Question 1 is 'yes', will the sale of the Property be eligible for the margin scheme under section 75-5 of the GST Act? | Summary: This question is not applicable as the sale will not be a taxable supply under section 9-5 of the GST Act. Section 75-5 of the GST Act provides that the margin scheme may apply to a taxable supply of real property if certain conditions are met. The sale of the Property is not a taxable supply under section 9-5 of the GST Act as it will be wholly input taxed under section 40-65 of the GST Act as established in Question 1. Therefore, the margin scheme is not applicable.

Will you make a taxable supply under section 9-5 of the GST Act when you sell the Property?