The first question is whether the sale is a taxable supply, which it is not unless it is made in the course or furtherance of an enterprise. So the sale of a single block carved from a family backyard is generally not a taxable supply, while a multi lot subdivision might be an enterprise, and the sale of a long held investment property might be the realisation of an asset rather than an enterprise.
Established residential premises are not subject to GST. New residential premises, being homes sold for the first time within a set period after construction or substantial renovation, are a taxable supply. Under GSTR 2012/5 the buyer's intention is not relevant, so a buyer's plan to redevelop does not change the character of existing residential premises in the vendor's hands, and a house that constitutes residential premises at the date of supply is input taxed.
Most non residential real estate is a taxable supply, subject to GST free categories, being the sale of a going concern, farmland supplied for farming, and subdivided farmland. The farmland exemption applies where the land has been used for a farming business for at least the set period before sale and the buyer intends to continue farming, counting predecessors in title. The margin scheme under section 75.10 of the A New Tax System (Goods and Services Tax) Act 1999 can reduce GST on an eligible sale by taxing only the margin, being the amount by which the sale consideration exceeds the vendor's acquisition cost, but it is not available where GST on an earlier sale was worked out without the margin scheme.
CMK Legal's property and conveyancing team can help with this.
GST on property is technical and the labels matter, so most people are best directed to an accountant or an Australian Taxation Office ruling. The going concern and farmland exemptions and the margin scheme each have strict conditions.
Law referenced: A New Tax System (Goods and Services Tax) Act 1999, including s 75.10 (margin scheme); GSTR 2012/5.