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Edited version of your written advice
Authorisation Number: 1051458784629
Date of advice: 23 November 2018
Ruling
Subject: Sale of new residential premises
Question 1
Is the sale of a new residential premises that has been built for private purposes subject to GST?
Answer
GST is payable on taxable supplies. According to section 9-5 of the A New Tax System (Goods and Services Tax) 1999, one of the requirements of a taxable supply is that you make the supply in the course of an enterprise that you carry on. The sale of the new residential premises in this instance is not subject to GST because you are not selling it in the course of an enterprise. According to the facts provided you are selling the property due to ill health and other personal circumstances.
Therefore, no GST is payable as the supply is not a taxable supply.
Question 2
If the answer to the above question is ‘no’ pursuant to section 14-250 of Schedule 1 to the Taxation Administration Act 1953 (TAA) is an amount for GST required to be withheld?
Answer
No, an amount for GST is not required to be withheld under section 14-250 of Schedule 1 to the TAA as the sale of the property is not subject to GST.
Relevant facts and circumstances
You purchased a residential vacant block of land (property) with the intention of building your primary place of residence.
Construction work on the property has now been completed.
You are not registered for GST and you do not carry on any enterprises.
You did not have any intention to carry any enterprise from the property and the house was planned to meet your special needs. However, you felt that it would be difficult to manage this large house due to your age and health issues and as such decided to move in with a family member who has offered to take care of you in their home.
You will be selling the newly built residence (property) to a third party at arms’ length.
Relevant legislative provisions
Section 9-5 of the A New Tax System (Good and Services Tax) 1999
Section 14-250 of the Taxation Administration Act 1958