When you sell a property, you may be carrying on an enterprise. If you are carrying on an enterprise, you will need to have an Australian business number (ABN) and register for GST – even for one-off transactions.
Below are the things you should consider when selling a property:
- if you subdivided land, or acquired new land and built new residential premises. ATO information on GST at settlement will help.
- your intent for the property when you first bought it
- if your original intent was to develop it for resale at a profit, your activities may be regarded as an enterprise
- if your intent changed. For example, you were not able to sell the property so instead you rented it out, there could be a change in creditable purpose.
- if the turnover from your property transactions and other transactions are more than the GST registration threshold, you are required to register for GST.
When you are carrying on an enterprise solely because you sold property as a one-off transaction, you must:
- have an ABN and register for GST. You need to lodge activity statements for the periods required.
- cancel you ABN and GST registration once your enterprise has ceased.