GST on sale of PPOR

Discussion in 'Accounting & Tax' started by punti, 12th Jul, 2020.

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  1. punti

    punti Active Member

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    Hi all,

    A friend and I are debating GST on property.

    He bought a property a couple of years ago as his PPOR. Him and his partner have lived in the property since purchase and have recently just completed a substantial renovation. He is looking to sell after living in the property for 3 months from completion. This is now his 2nd PPOR in 3 years that he has bought, renovated and sold.

    He allegedly spoke to the ATO and was told he is not liable for GST or CGT but from what I understand, GST should be payable.

    Is he liable for GST?
     
    punti, 12th Jul, 2020
    #1
  2. wylie

    wylie Moderator Staff Member

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    I'm no tax expert, but are you suggesting he should be liable because he is making a business of buying, renovating and selling?

    I cannot see he would be up for GST if he's lived there a few years and renovated it. I guess if he continues to do this, there comes a time when it is considered a business.

    One of the accountants or someone who knows a bit more will jump in soon I hope.
     
    wylie, 12th Jul, 2020
    #2
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Prob not
     
    Terry_w, 12th Jul, 2020
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  4. Mike A

    Mike A Well-Known Member

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    question is whether it is in the course or furtherance of an enterprise. would need more facts.
     
    Mike A, 12th Jul, 2020
    #4
  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Could be several reasons why it is not subject to GST and tax incl as a capital gain
    - Enterprise ?
    - How substantial the renovation was should be given tax advice.
    - Was it an actual main residence and did it overlap with any other property ?
    - Timing of the contract to sell ensuring at least 3 months if it is a main residence
     
    Paul@PAS, 13th Jul, 2020
    #5
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