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This edited version has been archived due to the length of time since original publication.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

    ● You are an entity and you are registered for the goods and services tax (GST).

    ● You are the owner of real estate property situated at the specified address.

    ● The property is one single lot of land on one single title.

    ● The property consists of a large parcel of land with a house on the land.

    ● The property is currently being leased under a residential tenancy agreement and occupied as a residence by the tenant.

    ● The premises are not new residential premises for GST purposes.

    ● You have entered into a contract to sell the property to a purchaser.

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

      (b) is intended to be occupied, and is capable of being occupied, as a residence or for residential accommodation;

(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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