Summary of GST status of real property |
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Type of property |
Example |
GST treatment |
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Sale |
Real Property |
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Residential |
Existing residence | input taxed (No GST on Sale) | |||
| New residence | Newly built or substantially renovated | Taxable (GST on Sale) | |||
| or built to replace | |||||
Commercial |
ResidentialHotel, motel, boarding house |
Taxable (GST on Sale) |
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| Commercial property | Factory, office | Taxable (GST on Sale) | |||
| Farm Land | Sale to farmer | GST-free if sold on the basis that it will | |||
| Continue to be used as farm land | |||||
| Going Concern | Sale of property as part of an enterprise (business) | GST-free if conditions satisfied | |||
Income |
Rental Real Property |
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Commercial |
residential |
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| * short-term | Hotel | Taxable (GST on income) | |||
| * long-term | boarding house / on site caravan | input taxed concession (Div 87) | |||
| Commerical Property | Factory, office | Taxable (GST on income) | |||
Any transaction involving real property is important to understand how GST may apply. The GST applicable can be complex as it will depend on a number of factors
Vacant Land Sales
Commercial Property
Commercial Residential Property
Residential Premises – Non Commercial
– New or Used
– Substantial Renovations
– Demolition & Rebuild, Duplex, Small Developments & battle- axe blocks
– Change of Use
Is the property transaction considered an Enterprise, if so GST will be applicable.
Are the parties to the contract registered for GST or required to be registered for GST.
Method of Calculating GST
– Margin Scheme calculates the GST on the profit margins.
– GST Adjustment periods and when applicable
GST Property Decision Tools – to help determine the GST Treatment of the Property Transaction
GSTR 2009/4 ATO Ruling on how to calculate GST Adjustments on changes in use (creditable purpose)
Reviewing any real property purchases, developments, to ensure the GST treatment is fully understood and optimised for your situation.
