Hey all, Just a hypothetical as i find deciphering through the ATO's GST info hard to understand. Someone purchases a new block of land with the intention of building their 'forever home'. They employ a builder who builds the new house and then they live in the house continuously for 1.5 years. They then need to sell the house for whatever reason. Are they liable for GST as the property is less than 5 years old when sold? Assuming the owner is registered for GST. I Wasn't sure if there was an exemption as it was a PPOR? Thanks
If the intention was not to build to profit then its a CGT asset. A single stand alone dwelling is likely to meet that test esp if occupied for 1.5yrs. If the intention was to systematically profit and the three months is used as a scheme element then it may be an enterprise (Refer MT 2006/1). Only when there is an enterprise does GST kick in. If its a CGT asset then not an enterprise no GST issues occur and the main residence exemption would be satisfied by occupying for three months (min) after completion. The MRE backdates to the land too !! BUT where you lived during the build cant also be exempt.
