GST treatment
Scenario:
I have a residential investment property which is a serviced apartment; it is managed by a motel chain. I have received an offer to sell the unit to a potential buyer.
My question is, does this sale of property attract GST?
Explanation:
It depends on your GST registration status. In GST Rulings GSTR 2012/5 and GSTR 2012/6, the Commissioner has made it clear that arrangements of this type are supplies of commercial residential premises. If your GST turnover from this property was $75,000 or more per annum, you would have had an obligation to register for GST in relation to this enterprise; If you are registered for GST, then the sale of the property would be taxable. If you are not registered for GST, then the sale of the property would not force you to. This is because s188-25 allows disregarding to proceeds from the sale of capital assets from your GST turnover. In other words, the sale proceeds would not be included in your GST turnover and would not push you over the threshold for registration.