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Edited version of your written advice
Authorisation Number: 1012819031879
Ruling
Subject: GST and sale of real property
Question
Is the sale of the Property a taxable supply?
Answer
No.
For the sale to be a taxable supply all the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) must be satisfied.
The sale satisfies the requirements of paragraphs 9-5(a), 9-5(b) and 9-5(c) of the GST Act as follows:
• the sale is made for consideration
• the sale is made in the course of the leasing enterprise that you are carrying on and
• the sale is connected with Australia because the Property is in Australia.
However, the requirement of paragraph 9-5(d) of the GST Act is not satisfied because you are not registered. Furthermore, you are not required to be registered for GST because you do not meet the registration turnover threshold. The sale of the Property constitutes a transfer of ownership of a capital asset and the proceeds from the sale are excluded in the calculation of your projected GST turnover.
Therefore, as not all the requirements of section 9-5 of the GST Act are met, the sale of the Property is not a taxable supply.
Relevant facts and circumstances
You are the owner of the commercial Property.
The Property was first leased a number of years ago, shortly after you acquired it. You are currently leasing the Property to an unrelated entity and are receiving rental income of less than $75,000 per annum.
You have no other enterprise and you are not currently registered for GST.
You intend selling the Property for over $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 9-20.
A New Tax System (Goods and Services Tax) Act 1999 section 23-5.
A New Tax System (Goods and Services Tax) Act 1999 section 188-5.
A New Tax System (Goods and Services Tax) Act 1999 section 188-10.
A New Tax System (Goods and Services Tax) Act 1999 section 188-15.
A New Tax System (Goods and Services Tax) Act 1999 section 188-20.
A New Tax System (Goods and Services Tax) Act 1999 section 188-25.
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