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Edited version of private advice
Authorisation Number: 1051758674344
Date of advice: 24 September 2020
Ruling
Subject: GST and sale of property
Question
Is GST payable on the sale of the property?
Answer
No.
GST is payable on a taxable supply. Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) outlines the conditions that must be satisfied in order for a 'taxable supply' to be made, which include that the supply is made in the course or furtherance of an enterprise that you carry on and that you are registered or required to be registered for GST.
We consider that you are not carrying on an 'enterprise' as defined in section 9-20 of the GST Act and you are neither registered nor required to be registered for GST in regard to your activities relating to the sale of the property.
Your sale of the property is not a taxable supply and will not attract GST.
Relevant facts and circumstances
You own a property in Australia (the Property).
You purchased the Property for $X in YYYY as tenants-in-common.
The Property is zoned for primary production however, it has never been used for primary production. You are not registered for GST.
There is a small residence on the Property.
You lived in the residence from the time you purchased the Property until MMYYYY, at which time you both moved into rented premises due to declining health.
The total size of the Property is less than X. There have been no improvements made to the Property.
You have continued to pay the Council rates, which state that the land use is residential.
Although the residence is now dilapidated, it still has basic features necessary for human habitation.
You have sold the Property to your neighbour for $X (no GST).
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 9-40