• When to charge GST (and when not to)

    You charge GST, and account for GST on your activity statement, if you:

    • sell, trade-in or otherwise transfer ownership of a capital asset in Australia
    • are registered or required to be registered for GST

    This applies even if the asset was purchased before 1 July 2000 or the asset is sold to a person who is not in business (a private sale).

    You don’t charge GST when you dispose of a capital asset if it is:

    • not a business asset – for example, your family car that hasn't been used in your business
    • part of a business sold as a GST-free going concern
    • residential premises – for example, a block of residential apartments (this doesn't apply to new residential premises or commercial premises)
    • farm land – it must be land on which a farming business has been carried on for at least five years before the disposal, and the purchaser must intend that the land will continue to be used for a farming business.

    On this page:

    See also:

    • GSTR 2002/5 Goods and services tax: when is a 'supply of a going concern' GST-free?

    Non-profit organisations

    If you're an endorsed charitable institution, an endorsed trustee of a charitable fund, a gift-deductible entity or a government school (or a non-profit sub-entity of one of these organisations), and you dispose of a capital asset, the disposal will be GST-free if the payment or consideration you receive is either:

    • less than 50% of the GST-inclusive market value of the asset
    • less than 75% of the amount you paid (or were liable to pay) to purchase the asset being sold. This is generally the original cost of the asset.

    See also:

    Disposing of property

    If the capital asset is real property, you must account for GST unless the disposal is a GST-free or input taxed sale. Real property includes:

    • an interest in land or a right over land – for example, easements
    • a personal right to be granted such rights or interests – for example, options
    • a licence to occupy land
    • any other contractual right exercisable in relation to land – for example, a restrictive covenant.

    See also:

    Effect on registration turnover threshold

    You have to register for GST if your current or projected GST turnover meets the turnover threshold of $75,000 (or $150,000 for non-profit bodies).

    In working out your projected GST turnover, you don't include amounts received for capital asset disposals.

    So if you're not registered for GST, you don't have to register merely because the sale proceeds of a capital asset take you over the turnover threshold.

    See also:

      Last modified: 24 May 2017QC 16711