Edited version of private advice

Authorisation Number: 1052217564742

Date of advice: 12 July 2024

Ruling

Subject: GST - movable homes

Question

Is GST payable on the sale of a moveable home?

Answer

No. The supply of the moveable home is input taxed and, therefore, no GST is payable.

This ruling applies for the following period:

1 July 2024 to 30 June 2028

The scheme commenced on:

26 June 2023

Relevant facts and circumstances

Entity XX (You) owns and manages what it describes as a "mobile home" park where over 55s reside. The park is not a retirement village. It has been discussed and agreed that the homes in the park are more correctly described for tax purposes as "moveable homes" as they are not on wheels, but on stilts, and are structures designed to be used as a residence that can be relocated from site to site. All the homes are similar in size, comprising mostly 2 bedrooms but some with 3 bedrooms, and with the land area between 250 and 300 square metres.

Residents own the moveable homes in the park and pay you weekly or fortnightly site fees. Some residents are now relocating to aged care homes due to the age and selling their homes. Some residents sell their homes directly, via real estate agents, and some sell to XX Pty Ltd, which then on-sells them on the open market in situ. In a few instances, residents pass away and their homes are sold by their beneficiaries. You have advised that the trend is currently that X to Y homes are sold annually.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 sections 9-5, 9-30, 40-65, and 195-1.

Reasons for decision

Pursuant to section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act), a supply is not a taxable supply to the extent that it is a GST-free or input taxed supply.

Pursuant to subsection 9-30 of the GST Act, a supply is input taxed if it is treated as such under Division 40.

Accordingly, under subsection 40-65(1) of the GST Act, a sale of "residential premises" to be used predominantly for residential accommodation is input taxed.

"Residential premises" is defined by section 195-1 of the GST Act to mean, in the current context, a building that is either occupied as a residence or intended to be occupied, and capable of being occupied, as a residence.

Goods and Services Tax Ruling GSTR 2012/5: residential premises (GSTR 2012/5) provides our view of how Subdivisions 40-B and 40-C of the GST Act apply to supplies of residential premises. The abovementioned section 40-65 is contained in Subdivision 40-C. At paragraph 95 of GSTR 2012/5, we state:

A transportable building such as a demountable dwelling or a moveable home that is designed as a residence, or to provide residential accommodation, is residential premises when placed and installed ready for occupation.

For that purpose, we define "moveable home" to mean a structure designed to be used as a residence that can be relocated from site to site.

Accordingly, as that definition applies to the moveable homes in question, your supply of a moveable home will be an input taxed supply and no GST will be payable.