Private ruling: Goods and services tax (GST) and sale of property
Date of advice: 23 October 2017
Published: March 2018

Ruling: Q1: Will GST be payable on your sale of lots X and Y? | A1: No. Your projected GST turnover at the time of sale of lots X and Y (the property) will be less than $75,000. The sale of the property is excluded from the projected GST turnover calculation as it will be a sale of a capital asset. You held the property as a capital asset, as you held the property as a structural asset of a market gardening business and rental enterprise and the house was used by your partners as their residence. As your projected GST turnover at the time of sale of the property will be less than $75,000, you will not be required to be registered for GST. As you are not registered and will not be required to be registered for GST at the time of sale, GST is not payable on the sale of lots X and Y.

Relevant facts and circumstances: The partnership (you) is not registered for GST, but you were formerly registered for GST. You own two adjacent parcels of land – lot X and lot Y, which are located in Australia (the property). You purchased the two parcels of land many years ago. Since the time you purchased the lots, you have used them as a market garden growing vegetables, which you have sold through markets such as X. You rent out part of the property to an operator of a market gardening business. Partner X and partner Y have lived in the house on the property, which is their principal place of residence. You will sell the property to a developer. You will continue to use the property in your market gardening business; rent out part of the property for use by a market gardener and allow your partners to live in the house on the property up to the time of sale of the property. Your income from enterprise activities in the twelve month period beginning with the month of settlement of sale of the property will be less than $75,000.

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 23-5 | A New Tax System (Goods and Services Tax) Act 1999 Division 188


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