Topics on CGT and GST for property buyers (15)



Despite meeting one (or more) of these conditions, residential premises are not new residential premises where, broadly, they have been rented for a continuous period of at least five years since the time they became new residential premises. A continuous period is not broken by short periods between tenancies where the premises are actively marketed for rent. It does not, however, include periods where premises are used privately or are left vacant with no attempt to rent. Refer to S.40-75(2) of the GST Act and paragraphs 89 to 93 of GST Ruling (‘GSTR’) 2003/3. 

Note that the GST withholding rules do not apply to taxable supplies of new residential premises created through substantial renovations of a building, or where the property is regarded as commercial residential premises. Refer to S.14-250(2)(a) of Schedule 1. 

TAX WARNING – Vacant land is not residential premises 

The ATO does not consider a supply of vacant land to be a supply of ‘residential premises’ (even where the land is zoned for residential use), as it does not provide shelter and basic living facilities (and is therefore incapable of being occupied as a residence or for residential accommodation). Refer to paragraph 47 of GSTR 2012/5. 

However, vacant land may be subject to GST withholding where it is ‘potential residential land’ (as discussed below). 

Various other modifications to the definition of ‘new residential premises’ are contained in S.40-75 of the GST Act. These modifications do not widely apply and are not discussed in the notes. 


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Written by Panbo Ye

I help people discover POWERFUL unknowns in Tax Ideas | Wealth Strategies | Retirement Planning | Finance Solutions!

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