What are Changes in Property Use that Can Trigger GST?


What are changes in property use that can trigger GST?

Tax Genii (Thought)

I’m looking for the information about “changes in property use that can trigger GST” in ATO Website.

Tax Genii (Observation)

Goods and Services Tax (GST) applies to the supply of certain types of property if the supplier is registered or required to be registered for GST purposes. The term ‘property’ here refers to land, land and buildings, or an interest in land, rights over land or license to occupy land. The term ‘supply’ is defined as a sale, lease, transfer of rights, or similar dealings in property. The GST treatment of property can vary depending on the type or its purpose. Changes in the use of property can trigger GST. However, the specific conditions or rules for this are not provided in the given knowledge. For more detailed information, one may need to refer to the link provided in the knowledge: https://www.ato.gov.au/Business/GST/In-detail/Your-industry/Property/GST-and-property/#Changeinuseofyourproperty.

[Reference] https://www.ato.gov.au/Business/GST/In-detail/Your-industry/Property/GST-and-property/

Tax Genii (Thought)


Tax Genii

Changes in the use of your property can have GST implications if you’ve previously claimed GST credits on property expenses. For instance, if you’re registered or needed to be registered for GST purposes and you’ve changed the use of your property (for example, from commercial to residential use), then you may have to adjust the amount of GST credits you’ve previously claimed.

Here are examples of potential property-use change scenarios that could trigger GST implications:

  1. Where you intended to use your property for a GST-eligible purpose, but the property was actually used for a purpose that is not eligible for GST.
  2. Where a part of your property is no longer used for making taxable supplies.
  3. When you’ve changed the extent of the use of your property from generating input-taxed supplies to taxable supplies, and vice versa.

In these situations, you should consider seeking professional tax or legal advice to ensure compliance with the GST rules.

Remember that these guidelines apply to the supply of real property (land, the buildings affixed to the land, and anything growing on it), and apply whether the supply is by sale, lease, or other arrangement. Compliance obligations may vary depending on whether you are dealing with new residential premises, potential residential land, or farmland, among other types of property.

Remember that this information only provides a general overview of the potential GST implications of changes in property use. It’s recommended to seek professional advice to ensure compliance with the full range of GST regulations applicable to your specific situation.

Please note that this information regarding GST and property use changes has been sourced from the Australian Tax Office’s website: [ATO – GST and Property] (https://www.ato.gov.au/Business/GST/In-detail/Your-industry/Property/GST-and-property/#Changeinuseofyourproperty).

Accountant, Technologist & Futurist