1. In Scenario 1, if the contract fails to settle and the property is sold under another contract after 30 June 2000, is the sale subject to GST?
Yes, given that the supply (ie. the sale) of the property is made on or after 1 July 2000, it is subject to GST: subsections 6(3) and 7(1) of the A New Tax System (Goods and Services Tax Transition) Act 1999 (‘Transition Act’). Section 40-65 of the A New Tax System (Goods and Services Tax) Act 1999 (‘GST Act’), which provides that a sale of residential premises (to be used predominantly for residential accommodation) is input taxed, does not apply. This is because subsection 40- 65(2) specifically provides that the sale of ‘new residential premises’ is not input taxed. Section 195-1 of the GST Act defines ‘new residential premises’ as residential premises that have not previously been sold as residential premises and have not previously been subject of a long term lease (‘long term’ taken to be mean ‘for at least 50 years’). The property in question satisfies this definition. Despite the fact that the property was subject of an earlier sale contract, it had not previously been sold bec
