GST and sale of land by Body Corporate in New South Wales

Is the entity, a body corporate in New South Wales, making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it sells common property that has the entity's name on the title deed?

No, the entity is not making a taxable supply under section 9-5 of the GST Act when it sells common property that has the entity's name on the title deed.

The entity is acting as an agent for the owners of the property and as such, it is the owners making the supply of the common property.

The entity is an owners' corporation for a strata plan registered in New South Wales, referred to as a body corporate.

The entity sells a block of common property. The entity's name is on the title deed of the common property. The property is located in New South Wales.

Section 9-5 of the GST Act sets out the requirements that must be met for an entity to make a taxable supply. However, before applying the requirements of section 9-5 of the GST Act it is necessary to determine who is making the supply of the common property.

Ownership of common property of a strata plan varies under different State Acts and Territorial Ordinances. Section 20 of the Strata Schemes (Freehold Development) Act 1973 (NSW) provides that the estate or interest of a body corporate in common property vested in it or acquired by it shall be held by the body corporate as agent for the lot proprietors as tenants in common in proportions equal to their lot entitlements. The entity's name is on the title deed and as such, legal title is vested in the entity, but only in its capacity as an agent for the owners.

Paragraph 15 of Goods and Services Tax Ruling GSTR 2000/37 provides that when an agent uses their or its authority to act for a principal, then any act done on behalf of that principal is an act of the principal. The entity, as an agent, sells the common property of the owners. The entity is acting on behalf of the owners of the property and therefore, it is the owners of the common property who make the supply.

As the entity did not make the supply of the property, the entity is not making a taxable supply under section 9-5 of the GST Act. Note: The supply of the property by the owners will be a taxable supply where all the requirements of section 9-5 of the GST Act are satisfied.