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Edited version of private advice
Authorisation Number: 1051884764142
Date of advice: 12 August 2021
Ruling
Subject: GST and sale of commercial property
Question
Will your sale of commercial premises be a 'taxable supply' under Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
No. The sale of the commercial property will not be a taxable supply under section 9-5 of the GST Act since you are not registered and will not be required to be registered for GST under section 23-5 of the GST Act when the commercial property will be sold.
When you sell the commercial property that you currently lease you will be selling a capital asset; therefore you will not include the proceeds from the sale of this capital asset when calculating your projected annual turnover in accordance with section 188-25 of the GST Act. Since you do not have any other asset from which you will derive rental income that will increase your projected annual turnover and meet the registration turnover threshold, you will not be required to be registered for GST. Paragraph 9--5(b) of the GST Act is not satisfied in this instance.
The sale of the commercial property will not be a taxable supply. The sale will be outside the scope of the GST law and therefore not subject to GST.
Relevant facts and circumstances
The entities (you) jointly owned a commercial property. This is the only property in your joint names.
You currently receive a weekly rental income for leasing the commercial property.
You are not registered for GST as a partnership and individually.
You are considering selling the commercial property and you intend to sell the property as soon as practicably possible.
Currently you do not have a sale contract in place.
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 23-55
A New Tax System (Goods and Services Tax) Act 1999 section 188-25