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Property sales and GST

In most cases, the sale of the family home does not attract GST. However, there may be GST implications for the sale of other properties.

GST is charged on the supply of goods and services that are ‘taxable supplies. You make a taxable supply if:

  • You get paid for it (either money or barter) and
  • The supply is made in the course of an ‘enterprise’ that you carry on and
  • The supply is connected with Australia and
  • You are registered or required to be registered for GST.
  • However, it is not a taxable supply if it is regarded by the ATO as GST-free or input taxed.

Carrying on an enterprise is essentially performing an activity that is undertaken with a profit motive. Any enterprise which turns over more than $50,000 p.a. is required to be registered for GST. This may include the subdivision of your main residence block and construction of a building on the subdivided land which is then to be sold.

Therefore, if you are considering undertaking substantial renovations to properties or subdividing your main residence with the motive of generating a profit, GST could be a significant factor.

The application of the GST provisions to property transactions is complex. We highly recommend you consult us prior to committing yourself to a property transaction.

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