WHEN CAN SOMEONE BE EXEMPTED FROM PAYING GST ON SALE OF LAND/PROPERTY IN VICTORIA

In Victoria, Australia, the Goods and Services Tax (GST) typically applies to the sale of new residential properties and vacant land. However, there are circumstances in which someone may be exempted from paying GST on the sale of land/property. Here are some common situations in which such exemptions may apply:

Sale of Existing Residential Property:

GST generally does not apply to the sale of existing residential properties, such as homes or apartments that have been previously occupied. These are typically considered input-taxed supplies and are exempted from GST.

Going concern Exemption:

If a property sale is part of the sale of an entire business as a going concern, and both the buyer and seller agree to treat it as such, the sale may be exempt from GST. The going concern exemption is subject to specific conditions and must be agreed upon by both parties.

Sale of Land as a Private Individual:

Private individuals who are not registered for GST and are selling their private property are generally exempt from charging GST on the sale.

Farmland sales may be exempted from GST when certain conditions are met. For example, if the land is used for primary production, it may qualify for a GST-free sale. However, there are strict criteria to be met for this exemption.

Sale of Land to a Registered GST Entity:

If the buyer is a registered business entity and intends to use the land for a taxable purpose (e.g., a commercial development), they may be eligible to claim GST credits on the purchase, and the seller may need to charge GST on the sale.

It’s important to note that GST regulations are subject to change, and there may be additional exemptions or conditions that apply. For any specific transaction, it’s advisable to consult with a tax professional or the Australian Taxation Office (ATO) to determine the precise GST treatment.