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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of your written advice

Authorisation Number: 1051355463632

Date of advice: 6 April 2018

Ruling

Subject: GST

Question

Will the sale of the property be a sale of residential premises that is input taxed under section 40-65 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Yes.

Relevant facts and circumstances

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 40-65

A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision

A sale of residential premises is input taxed under section 40-65 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Under section 40-65 of the GST Act, supplies of residential premises are input taxed to the extent that they are to be used predominantly for residential accommodation.

Section 195-1 of the GST Act defines ‘residential premises’ to mean land or a building that:

(a) is occupied as a residence or for residential accommodation; or

(regardless of the term of the occupation or intended occupation) and includes a *floating home.

(*denotes a defined term in section 195-1 of the GST Act)

Goods and Services Tax Ruling GSTR 2012/5 discusses the meaning of ‘residential premises’, ‘residence’ and ‘to be used predominantly for residential accommodation’.

In your case, the property consists of land and a house. The house has been leased to a tenant and is used as a residence, for residential accommodation. Based on the facts provided, the property satisfies the definition of ‘residential premises’. The house is not new residential premises for GST purposes.

Therefore, when you sell this property, you will be selling residential premises. The sale of your property will be an input taxed supply under section 40-65 of the GST Act.

Where a supply is input taxed, no GST is payable on the supply. As such, you will not be required to pay GST on that sale.


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