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      Sale of Commercial Property in SMSF

      GST treatment

      Scenario:

      Our self-managed superannuation fund (SMSF) owns a commercial property. We decide to sell the property and are not currently registered for GST. The estimated selling price for this property would be 1.1 million dollars.
      Are we required to register for GST for the month (or any other period) in which the sale will take place (for reason that we are making a taxable supply of greater than S75,000)? Will the sale of the commercial property include GST? 
       
      Explanation:

      If the SMSF is not currently registered or required to be registered for GST, the sale of the commercial building by itself will not require them to register. An entity is required to register for GST if they are carrying on an enterprise and their GST turnover meets or exceeds the registration turnover threshold of $75,000 per annum.

      However, in working out an entity's GST turnover, you can disregard (inter alia) proceeds from the sale of a capital asset (GST Act s 188-25(a)). What this means is that if the SMSF's current or projected GST turnover (excluding any proceeds from the sale of the commercial property) is less than $75,000, the proceeds will not be included in their GST turnover.

      You will therefore not be required to register for GST and the sale of the commercial property can proceed as an out-of-scope supply (i.e. no GST).