Edited version of private ruling

Authorisation Number: 1011732740385

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Ruling

Subject: GST and property

Question

Is your acquisition of the property a creditable acquisition under section 11-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer: No.

Your acquisition of the property is not a creditable acquisition under section 11-5 of the GST Act.

Relevant facts and circumstances

You are registered for Goods and Services Tax (GST).

You have entered into a contract with the vendor to purchase a property for a certain amount. You have provided a copy of the contract.

The vendor is registered for GST and is carrying on a property development enterprise.

Pursuant to the contract you have been nominated as a substitute purchaser of the property.

A clause in the contract provided that the vendor is treating the sale of the property to you as an input taxed supply as it constitutes the sale of residential premises and not new residential premises. Another clause of the contract further provided that you are to apply for a private ruling from the Australian Taxation Office on the GST treatment of the sale of the property under the contract. The vendor is to provide reasonable assistance to the purchaser in obtaining the private ruling.

You have provided a copy of the conservation document prepared by Architects and heritage consultants as part of a permit application for the proposed development of the site. This provided details of the history of the property.

The property is a historic two-storey brick residence that has been used for both residential and non-residential purposes. There were additions made to the rear of the property.

You advised that a few years ago the vendor acquired the property. You have provided a copy of this purchase contract.

The vendor is a trust entity. Due to a change in trustee the property was transferred from the old trustee to the new trustee. The transfer of property was stamped as not dutiable in accordance with the change of trustee provisions set out in s.33 (3) of the Duties Act 2000. You have provided a copy of the transfer of land.

At the time the vendor purchased the property the property was being used as an office. The vendor sought to redevelop the property as a residential mixed use development.

The property is a heritage listed property.

The seller applied for heritage exemptions to redevelop the property. The conservation document details that the additions to the rear of the property were referred to as no significance and as a result could be demolished. The conservation document shows that the additions were aligned with the original building but architecturally quite distinct.

The conservation document shows the ground floor plan and the first floor plan of the building as it was before it was partially demolished.

The vendor wanted to develop the land in the rear half of the site by partially demolishing the existing building that is the later additions to the property and subdividing the land. The partial demolition would mean that the original historic two storey property is retained. The result is that both the existing building and the land would be reduced in size.

Demolition work was carried out by the seller before it had a change in trustees. You have provided a copy of the demolition plan.

The land was subdivided by the seller. The plan of subdivision was attached to the copy of the contract which you have provided. This involved creating Lot 1 that contains the remaining building after the partial demolition and contains the historic property. The resulting site dimensions are approximately less than half.

You advised that the vendor commenced restoring and developing the property in accordance with the proposals agreed with heritage authority. As set out in the completion of works memorandum (a copy of which is included in the contract for sale) the activities carried out by the vendor (and via the engagement of external consultants) included:

(i) general painting and repair of the property;

(ii) refurbishment of fence, roof and interiors

(iii) restoration of tiling and ceilings;

(iv) restoration of mosaics and fireplace;

(v) repair of electrical wiring;

(vi) the installation of new kitchen, bathroom and laundry; and

(vii) removal of one non-structural wall.

You advised that (based on discussions with the heritage authority) that the activities in points (e)(v)-(vii) above were allowed under the appropriate heritage exemption in order to modernise the property for contemporary living, while ensuring that the substance of the property was retained for heritage reasons. As at the date of your private ruling application you stated you are awaiting documentary confirmation in relation to this issue.

The completion of works memorandum details as follows:

The works included:

· Refurbishment of the interiors

· Reinstatement of missing section of wall, fireplace and associated mouldings

· Repair and reinstatement of decayed and damaged ceiling

· Repair and reinstatement of decayed and damaged joinery

· Demolition and removal of intrusive alterations and additions

· External repair and restoration

· Painting of external surfaces

· Painting of internal surfaces

· Retention of caustic tiles to verandah, hallway and garden path

· Treatment of the existing roof cladding

· Construction of new sections of garden wall to property boundary

· Refurbishment of existing cast iron fence

· Creation of new kitchen, bathrooms, laundry, and pantry along with associated fit out.

In your email you stated that demolition works occurred first in order to clear the site and commence construction in the rear of the site. Restoration works for the building that remained commenced two years later starting with site works and services rough-in.

In your email you responded as follows to a request to provide more details as to what renovation work involved:

To the best of our knowledge, the restoration works involved:

· general painting and repair;

· refurbishment of fence, roof and interiors;

· restoration of tiling and ceilings;

· restoration of mosaics and fireplace;

· repair of electrical wiring;

· the installation of new kitchen, bathroom and laundry; and

· the removal of the non-structural walls which separated the kitchen, meals area and living area;

· the removal of one non-structural wall in room A;

· increasing the size of the en-suite to the 2nd bedroom; and

· reinforcing the back wall of the master bedroom.

You provided a copy of the floor plan relating to the historic property that detailed the restoration works to be carried out.

With your permission a site visit of the historic property was carried out by staff from the Australian Taxation Office in the presence of the vendor's representative.

By letter you were requested to review and confirm the information obtained by those staff.

You confirmed and agreed with the following information:

General

· Some ceilings were replastered.

· The property has been restored.

· Most internal doors have been replaced with new doors.

· Replace and upgrade electrical wiring and plumbing to whole of building (including CBus + outlets + switches TV points and data points).

· New carpets (replacement)

· New cupboards - in hallway

· Chandeliers installed

· Repaired rendering - large part of external walls re-rendered

· New air conditioning to most rooms

· New replacement for damaged tiles on balconies most of balconies retiled

· Some additional rails on top of hand rails on stairs and balustrades (outside) to comply with regulations

· Complete painting of the inside and outside of the property

· Partial fence reconstruction with some new trees on the perimeter of the property but inside the fence - substantial landscaping, (lighting, irrigation, some new stairs).

· Restoration of balustrades

· Some architraves have been replaced.

Ground Floor specific

Room A

Internal non-structural wall removed.

New constructed roof due to demolition of room on level 1 above.

Room B

Removed.

Room C (living room)

Wall between Room C and Room D removed.

Door inserted.

New low voltage down lights.

Room D (meals room)

Non-structural plaster board wall between Room D and Room E removed.

Floor tiled to form part of kitchen tiling and open plan.

New low voltage down lights.

Room E

Non-structural plaster board wall between Room E and Room F removed to form such that Room E forms part of Room F(kitchen).

Door inserted.

Room F (kitchen)

Wall inserted to form pantry and laundry.

Complete new kitchen installed (new cupboards, new appliances, new bench tops, etc).

New low voltage down lights.

Laundry

New.

Pantry

New.

Powder Room

Appears to be new.

Terrace

Has been created. (Room H removed).

Demolition of extensions/additions on ground floor

First Floor specific

Master Bedroom

Back wall of Master Bedroom strengthened due to demolition of first floor adjacent to Master Bedroom.

Ensuite 1

Wall moved to enlarge Ensuite 1.

Whole bathroom replaced.

Verandah

Opened up and external windows removed.

Windows inserted to restore to original design.

Ensuite 2

Internal non structural plasterboard wall moved to increase size of Ensuite 2.

Ensuite replaced.

Ensuite 3

Brand new ensuite created by reducing size of Bedroom 4.

Bedroom 4

Internal walls changed to reduce size to accommodate Ensuite 3 and increase Ensuite 4.

Ensuite 4

Non structural plasterboard walls moved to increase size of Ensuite.

Ensuite replaced.

One bathroom window replaced.

Demolition of extensions/additions on first floor

After the renovation and restoration work was completed, the vendor furnished the property as a residence with a view to selling the property.

The vendor engaged a real estate agent to market the property for sale as a residential mixed use property to potential buyers, including the purchaser.

The purchaser acquired the property from the vendor on the basis it was a residence. You intend to use the property as a long-term residence for an employee after the settlement date.

At the time of sale by the vendor the property has all the required features of a residence including a new bathroom, kitchen and laundry and working lighting, heating and water.

Reasons for decision

Under section 11-5 of the GST Act you make a creditable acquisition if:

(a) you acquire anything solely or partly for a creditable purpose and

(b) the supply of the thing to you is a taxable supply and

(c) you provide, or are liable to provide, consideration for the supply, and

(d) you are registered, or required to be registered.

We consider that the requirements of paragraph 11-5(c) and (d) are satisfied. You have provided or are liable to provide consideration for the purchase and you are registered for GST. We now need to determine whether paragraphs (a) and (b) are satisfied. That is, that you have acquired the property for a creditable purpose and the supply of the property to you was a taxable supply.

Section 11-15 of the GST Act provides that you acquire a thing for a creditable purpose to the extent that you acquire it in carrying on an enterprise. However, under subsection 11-15(2) of the GST Act, you do not acquire the thing for a creditable purpose to the extent that:

· the acquisition relates to making supplies that would be input taxed (for example financial supplies and supplies of residential premises); or

· the acquisition is of a private or domestic in nature.

You advised that you are acquiring the property in order to provide it to one of your employees to use as their long term residence. In this case the acquisition relates to making input taxed supplies and is therefore not made for a creditable purpose. This view is contained in Goods and Service Tax Ruling GSTR 2001/3 at example 6 at paragraph 42 as follows:

Example 6

42. Best Ltd is a public company that supplies houses (residential premises) for senior executives to live in on an ongoing basis. The supplied premises remain the property of Best. Because the supply of such a fringe benefit is input taxed, Best is not liable for any GST on the supply of the benefit.

Accordingly, where you have not acquired the property for a creditable purpose, paragraph 11-5(a) of the GST Act is not satisfied.

We will now consider if the requirement in paragraph 11-5(c) of the GST Act is met that is, if the supply to you was a taxable supply.

The meaning of a taxable supply is provided in section 9-5 of the GST Act. A supplier makes a taxable supply if:

(a) the supply is made for consideration

(b) the supply is made in the course or furtherance of an enterprise that the supplier carries on

(c) the supply is connected with Australia, and

(d) the supplier is registered or required to be registered for GST.

However, the supply is not taxable to the extent that it is GST-free or input taxed.

The information you have provided indicates that the supply of the property by the vendor to you was for consideration, in the course of the vendor's enterprise, connected with Australia, and that the vendor is registered or required to be registered for GST.

On the basis of the facts provided, there are no provisions in the GST Act which would allow the property to be GST-free. Therefore, it remains to be determined whether the sale of the property to you was input taxed.

Division 40 of the GST Act is about input taxed supplies. If a supply is input taxed then no GST is payable on the supply and there is no entitlement to an input tax credit for anything acquired to make the supply.

Specifically, subdivision 40-C of the GST Act which is about residential premises is applicable to this case. Section 40-65(1) of the GST Act provides that:

a sale of real property is input taxed, but only to the extent that the property is residential premises to be used predominantly for residential accommodation (regardless of the term of occupation).

Real property is defined under section 195-1 of the GST Act to include any interest in or right over land. Therefore, the sale of residential premises is the sale of real property.

The term residential premises is also defined under section 195-1 of the GST Act to mean land or a building that is occupied or is intended to be occupied as a residence and which is capable of being occupied as a residence. In this case, at the time of sale the property to be supplied to you is the historic building which is capable of being occupied as a residence.

Goods and Services Tax Ruling GSTR 2000/20 which is about commercial residential premises, deals in part with residential premises and provides discussion on the definition under section 195-1 of the GST Act and the characteristics of residential premises. Paragraphs 28 and 29 of GSTR 2000/20 provides as follows:

Sleeping accommodation and facilities for human habitation

28. The definition states that residential premises must be capable of occupation as a residence. To be a residence in this sense, a place normally should have the facilities required for day to day living. These characteristics are inherent in the fabrication of the structure itself. The premises should have such things as areas for sleeping, eating and bathing, but it is not necessary that these things be arranged in a similar manner to a conventional house or apartment.

29. Premises that lack these basic features, may not be either residential premises or commercial residential premises. Supplies of buildings or other structures without these characteristics are subject to GST under the basic rules, regardless of whether or not they are or have been at one time, occupied as some form of residence.

You advised that the property has all the required features of a residence including a new bathroom, kitchen and laundry and working lighting, heating and water, etc. As such, we consider that the property to be supplied to you is capable of being occupied as a residence as it has the characteristics normally associated with residential premises and is therefore residential premises for the purposes of subsection 40-65(1) of the GST Act.

However, subsection 40-65(2) of the GST Act provides that the sale of residential premises is not input taxed to the extent that they are:

· commercial residential premises, or

· new residential premises other than those used for residential accommodation (regardless of the term of occupation) before 2 December 1998.

The term commercial residential premises is defined in section 195-1 of the GST Act to include, among other things, a hotel, motel, inn, hostel or boarding house. As a result, the definition of commercial residential premises encompasses similar establishments or establishments that exhibit characteristics that place them on a similar footing to hotels, motels, inns, hostels and boarding houses.

Paragraph 83 of GSTR 2000/20 provides that to be commercial residential premises, premises would need to possess each of the eight characteristics of commercial residential premises to some degree. The characteristics are as follows:

(i) Commercial intention;

(ii) Multiple occupancy;

(iii) Holding out to the public;

(iv) Accommodation is the main purpose;

(v) Central management;

(vi) Management offers accommodation in its own right;

(vii) Services offered;

(viii) Status of guests.

As such, we consider that the property to be supplied to you is not commercial residential premises because at that point in time when the property is transferred to you the property does not possess all of the characteristics of commercial residential premises.

Goods and Services Tax Ruling GSTR 2003/3 discusses when is a sale of real property a sale of new residential premises and discusses substantial renovations.

The meaning of new residential premises is found in section 40-75 of the GST Act which provides that residential premises are new residential premises if they:

· have not previously been sold as residential premises and have not previously been the subject of a long-term lease or

· have been created through substantial renovations of a building, or

· have been built, or contain a building that has been built, to replace demolished premises on the same land.

Paragraph 34 of GSTR 2003/3 provides that the reduced land area and building, as a 'package', needs to be considered in determining if the 'package' has previously been sold as residential premises. You have advised that the property to be supplied to you that is the remaining building and reduced land area has been used for residential accommodation as the building was previously used for residential accommodation. In addition the premises have not been built, or contain a building that has been built, to replace demolished premises on the same land.

We need to consider if the premises have been created through substantial renovations.

Substantial renovations

Section 195-1 of the GST Act defines substantial renovations of a building to mean:

renovations in which all, or substantially all, of a building is removed or replaced. However, the renovations need not involve removal or replacement of foundations, external walls, interior supporting walls, floors, roof or staircases.

Paragraph 55 of GSTR 2003/3 provides that:

55. This definition requires consideration of what work has been done to the building since it was acquired by the current owner.

Neither the term 'renovation' nor 'building' is defined in the GST Act. Therefore, they take their ordinary meanings. 'Building' means 'a substantial structure with a roof and walls, such as a shed, house, department store etc'. The general usage of the term 'renovate' means to make new or as if new again; restore to good condition; repair; to reinvigorate; refresh; revive'. However the term needs to be considered in light of the surrounding words in the definition of substantial renovation. In the context of the definition, we consider 'renovations' can be categorised as structural, non-structural or cosmetic work.

Paragraph 58 and 59 of GSTR 2003/3 provides that:

58. The section 195-1 definition of 'substantial renovations' stipulates that the renovations are substantial by requiring all or substantially all of the building to be removed or replaced. We consider the statement '...the renovations need not involve removal or replacement of foundations, external walls, interior supporting walls, floors, roof or staircases', means that the renovations may, but need not, involve the removal or replacement of foundations, external walls, interior supporting walls, floors, roof or staircases.

59. A building comprises a number of components, which can be termed either structural (i.e. the foundations, external walls, interior supporting walls, floors, roof, etc) or non-structural (including fixtures, fittings, plumbing, mechanical, fire systems, electrical, lifts, air conditioning, etc.

GSTR 2003/3 lists the criteria for substantial renovations and provides at paragraphs 60 to 62 the following:

60. Whether renovations are substantial is to be determined in the light of all the facts and circumstances.

61. We consider that for substantial renovations to occur for the purposes of the GST Act, the renovations need to satisfy the following criteria before it is necessary to make further inquiry to establish whether the renovations are substantial:

(i) the renovations need to affect the building as a whole; and

(ii) the renovations need to result in the removal or replacement of all or substantially all of the building.

62. Where one of the above criteria is not satisfied substantial renovations have not occurred and no further inquiry needs to be made.

The renovations need to affect the building as a whole

For a renovation to affect the building as a whole, work must be done to the whole, or a large part of the building itself. For renovations to be substantial they must directly affect most rooms in a building. The renovation of only one part of a building, without any work on the remaining parts of the building, would not constitute substantial renovations. For example, if only the kitchen and bathroom of a house are renovated, it would not be a renovation of the whole, or a large part, of the house.

The renovations need to result in the removal or replacement of all or substantially all of the building.

This will be when there is a removal or replacement of a substantial part of the:

· structural components of the building; or

· non-structural components of the building.

GSTR 2003/3 identifies structural work to include:

· altering, or replacing of, foundations;

· replacing, removing or altering of floors or supporting walls, or parts thereof (interior or exterior);

· lifting or modifying of roofs;

· replacing existing windows and doors such that it is necessary to alter brickwork (for example, replacing a single door with a double sliding door).

Where a substantial part of the structural components of a building are removed or replaced this will often mean that a substantial part of the non-structural components are also removed or replaced. However, a substantial renovation may also occur where a substantial part of the non-structural components are removed or replaced without the structural components being substantially affected. This view is expressed in paragraph 73 of GSTR 2003/3.

GSTR 2003/3 identifies non-structural work to include:

· replacing electrical wiring;

· replacing, removing or altering non-supporting walls, or parts thereof (interior or exterior);

· plastering or rendering an entire wall or walls;

· plumbing (eg replacing old metal pipes with copper pipes or plastic pipes);

· removing or replacing kitchen cupboards, bathroom fixtures, etc;

· removing or replacing air-conditioning or security systems.

Paragraph 66 of GSTR 2003/3 states that curtilage work associated with the renovations, but not directly attributable to the building itself, for example, landscaping and beautification of surrounding land, is not renovations of a building.

Cosmetic work by itself will not amount to substantial renovations. Paragraph 79 of GSTR 2003/3 states that if structural or non-structural work amounts to a substantial renovation that creates new residential premises, any cosmetic work undertaken will form part of the new residential premises.

Only renovation work carried out by the current owner are considered. The current owner in this case is the vendor which is a trust entity.

You advised that a few years ago the vendor entered into a contract of sale to acquire the land. Subsequently, due to a change in trustees the land was transferred from the old trustee to the new trustee. The transfer of land was stamped as not dutiable in accordance with the change of trustee provisions set out in s.33 (3) of the Duties Act 2000. Based on this information the owner of the property is the trust entity for GST purposes. The land changed hands due to the change in trustee roles only. Therefore the vendor has been the same owner. All works done on the property by the trust entity vendor are to be considered.

In determining whether new residential premises have been created through substantial renovations of a building, we gave consideration to the work performed on the building by the vendor. Paragraph 55 of GSTR 2003/3 requires consideration of what work has been done to the building since it was acquired by the current owner. This necessitates that we examine the whole of the building in its entirety. In this regard the building is the building before it was partially demolished.

In this case, you advised that the vendor wanted to develop the land in the rear half of the site by partially demolishing the existing building that is the later additions to the historic property and subdividing the land. The partial demolition would mean that the original historic property is retained. The result is that both the existing building and the land would be reduced in size.

Demolition work was carried out to the property and the land was subdivided. This involved creating a Lot that contains the remaining building after the partial demolition and contains the historic property. The resulting site dimensions are approximately less than half.

Therefore the vendor has removed a substantial part of the structural components of the building which includes the following:

Demolishing the rear additions to the property in order to restore the building to the original historic property. This involved removal of a large part of the building. The additions were aligned with the original building but architecturally quite distinct but nevertheless they did form part of the building.

However, as is outlined in GSTR 2003/3, the renovation of only one part of a building, without any work on the remaining parts of the building, would not constitute substantial renovations.

We now need to examine the works carried out on the remaining building.

You advised that the restoration works involved:

· general painting and repair;

· refurbishment of fence, roof and interiors;

· restoration of tiling and ceilings;

· restoration of mosaics and fireplace;

· repair of electrical wiring;

· the installation of new kitchen, bathroom and laundry; and

· the removal of the non-structural walls which separated the kitchen, meals area and living area;

· the removal of one non-structural wall in room A;

· increasing the size of the en-suite to the 2nd bedroom; and

· reinforcing the back wall of the master bedroom.

You also provided copies of the floor plan of the building before any works were carried out as contained in the conservation document and a floor plan of the works to be carried out on the building. In addition you provided a copy of the demolition plan.

With your agreement the following information was obtained by the Australian Taxation Officers who conducted the site visit. These have been categorised into structural, non structural or cosmetic works:

General

· Some ceilings were replastered. --(non structural work)

· The property has been restored.

· Most internal doors have been replaced with new doors; --(non structural work)

· Replace and upgrade electrical wiring and plumbing to whole of building (including CBus + outlets + switches TV points and data points) --(non structural work)

· New carpets (replacement) --(cosmetic)

· New cupboards - in hallway --(non structural work)

· Chandeliers installed --(cosmetic)

· Repaired rendering - large part of external walls re-rendered --(non structural work)

· New air conditioning to most rooms --(non structural work)

· New replacement for damaged tiles on balconies, most of balconies retiled --(non structural work/cosmetic)

· Some additional rails on top of hand rails on stairs and balustrades (outside) to comply with regulations --(non structural work/cosmetic)

· Complete painting of the inside and outside of the property --(cosmetic)

· Partial fence reconstruction with some new trees on the perimeter of the property but inside the fence - substantial landscaping, (lighting, irrigation, some new stairs).-- (curtilage)

· Restoration of balustrades --(cosmetic)

· Some architraves have been replaced --(non structural work/cosmetic)

Ground Floor specific

Room A

Internal non-structural wall removed --(non structural work)

New constructed roof due to demolition of room level 1 above. --(structural work)

Room B

Removed --(non structural work)

Room C (living room)

Wall between Room C and Room D removed--(non structural work)

Door inserted --(non structural work/structural work if brickwork altered)

New low voltage down lights --(cosmetic)

Room D (meals room)

Non-structural plaster board wall between Room D and Room E removed --(non structural work)

Floor tiled to form part of kitchen tiling and open plan --(cosmetic)

New low voltage down lights --(cosmetic)

Room E

Non-structural plaster board wall between Room E and Room F removed to form such that Room E forms part of Room F(kitchen) --(non structural work)

Door inserted --(non structural work/structural work if brickwork altered)

Room F (kitchen)

Wall inserted to form pantry and laundry --(non structural work)

Complete new kitchen installed (new cupboards, new appliances, new bench tops, etc) --(non structural work)

New low voltage down lights --(cosmetic)

Laundry

New --(non structural work)

Pantry

New --(non structural work)

Powder Room

Appears to be new --(non structural work)

Terrace

Has been created. (Room H removed) --(non structural work)

Demolition of extensions/additions on ground floor--(structural work)

First Floor specific

Master Bedroom

Back wall of Master Bedroom strengthened due to demolition of first floor adjacent to Master Bedroom --(structural work)

Ensuite 1

Wall moved to enlarge Ensuite 1; --(non structural work)

Whole bathroom replaced. --(non structural work)

Verandah

Opened up and external windows removed. --(non structural work)

Windows inserted to restore to original design --(non structural work/structural work if brickwork altered)

Ensuite 2

Internal non structural plasterboard wall moved to increase size of Ensuite 2. --(non structural work)

Ensuite replaced --(non structural work)

Ensuite 3

Brand new ensuite created by reducing size of Bedroom 4. --(non structural work)

Bedroom 4

Internal walls changed to reduce size to accommodate Ensuite 3 and increase Ensuite 4. --(non structural work)

Ensuite 4

Non structural plasterboard walls moved to increase size of Ensuite --(non structural work)

Ensuite replaced --(non structural work)

One bathroom window replaced --(non structural work)

Demolition of extensions/additions on first floor --(structural work)

After reviewing the information from the site visit as set out above, the floor plans in the conservation document before any works were carried out on the building, the floor plan of the works to be carried out on the building, the demolition plan and the other information you have provided; we find the nature and extent of the renovations itemised above had directly affected most of the rooms in the building. Without considering the demolition of the extensions it is noted that both the ground floor and the first floor of the property had renovation works carried out that directly affected most of the rooms. A substantial part of the non-structural components of the ground floor and the first floor of the property have been removed and replaced. The removal of the first floor room above room A and the construction of a new roof is structural work. In addition, cosmetic work has been carried out to most of the rooms. The whole building has been affected by the installation of electrical wiring (including CBus, outlets, switches, TV points, data points) and plumbing and air conditioning.

Based on the information available, the renovation work was not restricted to a certain part of the building but it directly affected all rooms in the building. Therefore, we conclude that the property has undergone structural and non-structural work and that a substantial part of the building has been removed, replaced and relocated in undertaking the renovation work. Accordingly, we consider that, the property is new residential premises created by substantial renovations under paragraph 40-75(1)(b) of the GST Act. As such, the supply to you is not input taxed and accordingly, the supply to you will be a taxable supply where the vendor's supply meets all the requirements of section 9-5 of the GST Act. As such, paragraph 11-5(c) of the GST Act will be met. In summary paragraphs 11-5(b), (c) and (d) have been met but paragraph 11-5(a) is not met and accordingly, your acquisition is not a creditable acquisition.

The supply to you is a taxable supply and not input taxed where the vendor's supply meets all the requirements of section 9-5 of the GST Act. However your acquisition of the property is not a creditable acquisition under section 11-5 of the GST Act as your acquisition will be used to house an employee and as such relates to making input taxed supples.