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This edited version has been archived due to the length of time since original publication.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.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your written advice

Authorisation Number: 1013101644963

Date of advice: 4 October 2016

Ruling

Subject: Goods and services tax (GST) and sale of property

Question

Is GST payable on your sale of the specified property?

Answer

No.

GST is payable on a taxable supply. A supply is a taxable supply if it meets all the requirements of section 9-5 of the GST Act.

One of the requirements of section 9-5 of the GST Act is that you are either registered or required to be registered for GST (paragraph 9-5(d) of the GST Act).

Section 23-5 of the GST Act provides that you are required to be registered for GST if:

    • you are carrying on an enterprise, and

    • your GST turnover meets the registration turnover threshold of $75,000 ($150,000 for non-profit bodies)

Section 188-10 of the GST Act provides that your GST turnover meets the registration turnover threshold if:

    • your current GST turnover is $75,000 or more and the Commissioner is not satisfied that your projected GST turnover is below $75,000, or

    • your projected GST turnover is $75,000 or more.

However, when calculating your projected GST turnover, section 188-25 of the GST Act requires you to disregard any supply made, or likely to be made, by you by way of transfer of ownership of a capital asset. Accordingly, the proceeds from the sale of your property will not be included when calculating your projected GST turnover.

You advised that your rental income is less than $75,000 per annum and you do not carry on any other enterprise. Therefore, the sale of the property is not a taxable supply as you are not registered or required to be registered for GST. You are not liable to pay GST on the sale of the property.

Relevant facts and circumstances

You are not registered for GST.

You own a commercial property. You purchased the property many years ago.

You lease out the property. The rent is under $75,000 a year. The specified term of the current written lease agreement is X years, commencing on a specified date.

You will sell the property for over $75,000.

You do not lease out property, or carry on any business or enterprise, at other locations.

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 section 188-10

A New Tax System (Goods and Services Tax) Act 1999 section 188-25


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