Selling and the GST

Will GST apply to the sale of the family home?
No. In most cases GST will not apply to the sale price of existing residential real estate, including the family home.

Will GST apply to agents fees and advertising costs incurred when selling my property?
Yes. GST will apply to agent's fees and advertising costs agreed to when entering into a Selling Agency Agreement.

Will GST apply to the sale of new homes by developers?
Yes. GST will apply to the sale of newly constructed residential properties by a developer who is registered for GST. The margin scheme (see later) may provide significant savings in this regard.

Will GST apply to the sale of a residential investment property?
Generally, GST will not apply to the sale price of any existing residential property irrespective of whether it is a family home or an investment property. GST will however apply to the sale price of newly constructed homes, including investment properties, which are sold by a developer who is registered for GST.

Will GST apply to the sale of vacant residential land?
GST will apply to the sale of vacant residential land notwithstanding that it may have been sold previously, if the entity selling the land is registered or required to be registered for GST, the supply is made in the course or furtherance of the entity's enterprises, the entity makes the supply for consideration and the supply is connected with Australia (s9-5 GST Act). However, the parties to the sale of the land may consider the application of the margin scheme to reduce the amount of GST payable on the sale.

Will GST apply to the sale of a home by an original owner/ builder?
In most cases, the sale of a home by the original owner/builder will not be subject to GST unless that home was built in the course of, or furtherance of, their building enterprise.

Will an auction price include GST?
This will depend on the type of property being auctioned and whether GST is applicable to the proceeds of the sale. For the sale of private residential property there is no GST however, commercial property may attract GST and accordingly the auction price will be GST inclusive. The auctioneer will be required to announce before the sale whether the auction is being conducted on a GST inclusive or GST exclusive basis. The auctioneer will also need to announce whether the seller is registered for GST. If the margin scheme is being adopted by the seller then it is recommended that the property be auctioned on a GST inclusive basis.

Courtesy of the Real Estate Institute of Queensland (REIQ)

REIQ website at www.reiq.com.au