Whether a Property Constitutes Residential Accommodation for GST Purposes

Under the GST Act, a sale of real property is “input taxed” (ie no GST is payable on the sale), if the property is “residential premises to be used predominately for residential accommodation”, and other requirements are met. Although the phrase from the GST Act appears straightforward, it has been subject to lengthy arguments before the courts.

In the most recent case, the Full Federal Court held that whether a property was residential premises to be used predominately for residential accommodation, and therefore input taxed, was to be determined objectively by reference to the physical characteristics of the property as at the date of acquisition. 

Are you planning on selling a residential property?  GST should be part of any tax planning considerations.  Please contact our office for further advice.