With regards to GST 5 year rule for new residential premises, does 5 year rule only apply to rent? I understand that one exemption is rent out continuously for 5 years. 1 What about if don't rent it out, use it for private purpose for 5 years. Or stay there for 2 years, then then rent out for 4 years, the property then is 6 years old before I sale it, i didn't rent it out for 5 years. Do I still need to pay for GST? 2 And if I build a new property and move in as my main residence and sale in 4 years. Since it's always my main residence, but less than 5 years, do I still need to pay GST?
The 5 year rule only applies where new residential premises constructed by an enterprise are continually rented aftre completion (and not marketed for sale while rented!!) for not less than 5 years and THEN sold. A recent case applied a strict view to the test. They sold at 5 years but didnt allow for the time when it was rented and still marketed for sale. Failed the test. I think you may be missing some other elements of the GST laws. 1. Is there an enterprise? 2. Is there a taxable supply of NEW residential premises. In 1. You may not need to pay GST BUT cant claim GST on the build of course in 2. There may not be an enterprise BUT if the home is a element of a enterprise you may still be liable when new premises are first sold. Personal tax advice time or you could attempt to self assess based on the GST ruling which I dont recommend as other matters outside the scope of the ruling may impact
Is there a pro-rating of the GST depending on whether rented immediately after construction, and then sold after 2 vs 4 vs 5.1 years? What if the GST on construction had not been claimed? Is the GST payable just a net calculation?
The definition of 'new residential property' A NEW TAX SYSTEM (GOODS AND SERVICES TAX) ACT 1999 - SECT 40.75 Meaning of new residential premises
The best way to address the issue concerning apportioning tax credits can be found in the relevant GST tax ruling. It offers different methodologies depending on the issue/s. The ability to claim GST on the build and the calculation basis will be affected by a variety of factors. The drafting of the sale contract may also be important
