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Edited version of private advice
Authorisation Number: 1051595312369
Date of advice: 1 November 2019
Ruling
Subject: GST and the sale of real property
Question
Will GST be payable on the sale of the specified real property?
Answer
No.
Relevant facts and circumstances
· You are the registered proprietor on title for the specified real property (Property).
· The Property is situated in Australia.
· The Property is currently being leased out to a third party in return for rental payments.
· You are currently not registered for the goods and services tax (GST).
· You are now selling the Property.
· You do not currently carry on and will not carry on any other enterprise or business activities in the period up to the sale or in the next 12 months following the sale.
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 188-25
A New Tax System (Goods and Services Tax) Act 1999 section 195-1
Reasons for decision
GST is payable on taxable supplies. You make a taxable supply if you meet the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), which states:
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 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.
(*Denotes a term defined in section 195-1 of the GST Act)
GST registration
Section 23-5 of the GST Act provides that an entity is required to be registered for GST if:
(a) the entity is carrying on an enterprise, and
(b) the entity's GST turnover meets the registration turnover threshold.
The applicable registration turnover threshold in this case is $75,000. You have a GST turnover that meets the registration turnover threshold if your current GST turnover is at or above $75,000 and your projected GST turnover is not below $75,000.
On the facts provided, we consider that you will not satisfy all the requirements of section 23-5 of the GST Act. Consequently, you will not be required to be registered for GST at the time of the proposed sale of the Property. Therefore, the requirement of paragraph 9-5(d) of the GST Act will not be met.
As not all of the requirements of a taxable supply under section 9-5 of the GST Act will be met at the time of sale, the sale will not be a taxable supply.
Consequently, you will not be liable to pay GST on the sale of the Property.