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Edited version of private advice
Authorisation Number: 1051788599112
Date of advice: 9 December 2020
Ruling
Subject: Goods and services tax and residential premises
Question
Is the supply of the specified Property by the Vendor to the Purchaser, a taxable supply pursuant to section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999?
Answer
No. The Property that was supplied was intended for and was used for residential accommodation and was not new residential premises nor commercial residential premises as defined in the GST Act. Therefore, the supply of the Property was an input taxed supply pursuant to section 40-65 of the GST Act and no GST is payable on the sale of the Property.
Relevant facts and circumstances
On ddmmyyyy the Vendor entered into a contract to sell to the Purchaser a property located in Australia.
The Vendor is registered for GST and is a deductible gift recipient and registered as a charity under the Australian Charities and Not-For-Profits Commission Register.
The Sale price was $X.00. The Contract provided that the sale was inclusive of GST unless the worlds Plus GST appeared in the Box. The sale price was set out as Plus GST.
The Property is on a single title and contains x standalone residential units. Each unit has a bathroom, kitchen, lounge, bedrooms and laundry. A fence divides the individual units. The property does not have any common facilities such as a community hall, meals area or onsite caretaker facilities.
The Vendor operated the premises as a retirement village under the loan lease model. The independent living units were occupied pursuant to Licences to Occupy at a fee.
To record the use of the premises, a Retirement Village Notice and Statutory Charge was registered on ddmmyyyy. The units ceased to be used as retirement village units on ddmmyyyy when the last person occupying the units vacated their unit. The vendor has not used the property as a retirement village since the last resident vacated the land, nor have the units been occupied as dwellings since ddmmyyyy.
The vendor subsequently removed the Retirement Village Notice and Statutory Charge on ddmmyyyy.
The Property will be supplied with vacant possession. The sale contract settled on ddmmyyyy.
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 40-65
A New Tax System (Goods and Services Tax) Act 1999 Section 195-1