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Edited version of private advice
Authorisation Number: 1051560259717
Date of advice: 1 August 2019
Ruling
Subject: Sale of Residential Premises
Question
Is the sale of your new dwelling at X (the Property) used by you as a family home a taxable supply under section 9-5 of the GST Act?
Answer
No
Relevant facts and circumstances
You purchased vacant land at X (the Property) in Y and construction of a dwelling commenced the following February.
You have been living at the Property for nearly X years. The occupancy permit was issued in Z.
It was your intention to build a family home in which you would stay for many years. However, you have recently decided to put the Property on the market due to financial pressure.
You have advised that you are not carrying on an enterprise.
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 Paragraph 9-5(b)
A New Tax System (Goods and Services Tax) Act 1999 Paragraph 9-5(d)
A New Tax System (Goods and Services Tax) Act 1999 Section 9-40
A New Tax System (Goods and Services Tax) Act 1999 Subsection 40-65(1)
A New Tax System (Goods and Services Tax) Act 1999 Section 195-1
Reasons for decision
Section 9-40 provides that you must pay GST on any taxable supply that you make.
Under section 9-5, you make a *taxable supply if:
(a) you make the supply for *consideration; and
(b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and
(c) the supply is *connected with the indirect tax zone; and
(d) you are *registered, or *required to be registered
However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed. Emphasis added.
Subsection 40-65(1) states:
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).
Section 195-1 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 for residential accommodation;
(regardless of the term of the occupation or intended occupation) and includes a floating home.
Applying the above to your situation, you are not liable for GST on the sale of the Property since the supply or sale of your dwelling used as a family home is not a taxable supply under section 9-5 because:
· it is an input taxed supply [subsection 40-65(1)];
· it is not supplied in furtherance of any enterprise you carry on [paragraph 9-5(b)]; and
· you are not registered or required to be registered [paragraph 9-5(d)].