Do I pay GST when Buying or Selling a House?

Posted on June 27th, 2016

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by Lachlan Page

Lachlan Page is a Solicitor at Mullane & Lindsay and is part of our Commercial, Property & Estates Law team.

When buying or selling a property, it is important that you consider any GST implications under the A New Tax System (Goods and Services Tax) Act 1999 (CTH) (“the Act“).

The Act provides that the sale of a property can either be treated as a taxable supply, GST free or an input taxed supply. Each of these categories result in different treatment in relation to GST.

Generally speaking, the sale or purchase of a residential premises will be GST free. A residential premises is defined as a premises that can be occupied, is occupied or is intended to be occupied as a residence. As the sale/purchase of vacant land cannot be occupied until a residence is constructed, vacant land will not be considered a residential premises.

GST will also be payable on the sale/purchase of new residential premises. This includes buying properties off the plan, new homes constructed on vacant land and new homes that replace demolished existing homes. A residential premises will no longer be considered as new when it has been occupied as a residence continuously for a period of five years or more.

Although the above sets out the general principles, there are certain exceptions to the above and detailed accounting advice should be obtained in relation to your particular set of circumstances and the property you wish to sell/purchase.

Lachlan Page is a Solicitor at Mullane & Lindsay and practises primarily in residential and commercial property transactions and estate planning and administration.  If you require any assistance in this area please contact Lachlan Page to arrange a consultation or contact our Newcastle office.

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