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Edited version of private advice
Authorisation Number: 1051574985315
Date of advice: 2 September 2019
Ruling
Subject: GST and new residential premises
Question
Are you required to be registered for GST in relation to your development of Lot A and Lot B?
Answer
No.
You are currently not required to register for GST as the GST turnover from your existing enterprise is below $75,000.
As you do not intend to sell Lot A or Lot B we only need to consider your intended use for each Lot.
Lot A will be used for a private purpose and has no impact on your GST turnover.
You will use Lot B for residential rent. Residential rent is input taxed and is excluded from the calculation of your registration turnover threshold.
Therefore your GST turnover will not meet the GST registration threshold and you will not be required to register for GST as a result of your use of Lot A and Lot B.
If you decide to build for sale you will need to consider if the proceeds are included in your GST turnover.
Relevant facts and circumstances
You are a partnership not registered or required to be registered for GST.
The partners are Entity A and Entity B.
You carry on an enterprise. Your turnover from your enterprise does not exceed $75,000.
You intend to build a house on Lot A for the purpose of a new home for Entity A and Entity B to live in.
You intend to build a house on Lot B for the purpose of a home for Entity A and Entity B's relative to live in. Entity A and Entity B will continue to have ownership of Lot B and allow their relative to live in the house. Their relative will be charged rent and rates.
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 9-20
A New Tax System (Goods and Services Tax) Act 1999 Section 23-5
A New Tax System (Goods and Services Tax) Act 1999 Section 40-35
A New Tax System (Goods and Services Tax) Act 1999 Division 188