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Edited version of private advice
Authorisation number: 1052362353371
Date of advice: 17 February 2025
Ruling
Subject: GST - sale of property
Question
Will the sale of the property be subject to GST when sold?
Answer
No. The sale of the property will not be subject to GST when sold as it is the sale of an input taxed supply of residential premises and does not meet the requirements of a taxable supply in accordance with section 9-5.
This ruling applies for the following periods:
Year ending 30 June 20YY, to
Year ending 30 June 20YY.
The scheme commences on:
DD MM YYYY
Relevant facts and circumstances
You purchased a residential property.
The property was an established residential property.
The property, when purchased required renovations.
Due to the additional cost of these potential renovations and the initial cost of the property, you experienced financial difficulties and decided to sell the property.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999section 9-5
A New Tax System (Goods and Services Tax) Act 1999subsection 40-65(1)
Reasons for decision
Under section 9-5, an entity makes a taxable supply where the supply:
1. is made for consideration; and
2. is made in the course or furtherance of an enterprise being carried on; and
3. is connected with the indirect tax zone; and
4. is made by a supplier who is registered or required to be registered for GST.
However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.
Under subsection 40-65(1), the sale of residential premises is an input taxed supply where the property is residential premises to be used predominately for residential accommodation.
In this case, the property is a residential property which had been used predominately for residential accommodation. The sale of the property will be an input taxed supply of residential premises and is not subject to GST.
Conclusion
The sale of the property will not be subject to GST when sold by you, as you are selling an input tax supply of a residential premises and, as a result, the sale will not qualify as a taxable supply under section 9-5.