The GST five-year rule doesn’t apply to NDIS providers or endorsed charities, such as Community Housing Providers. In this article I discuss the reasons why, along with suggestions for legislative reform and a potential option available for some charities. A detailed worked example is included to illustrate the issues.

When selling an untenanted building or parcel of land, a vendor may be asked to grant a “going concern lease” to ensure the sale is GST-free and a duty saving is available to the purchaser. This creates GST risks that need to be managed by the vendor, but may also create risks for the purchaser (or their solicitor / agent), particularly in New South Wales with its tax promoter penalty regime. Documenting the reasons for the lease and obtaining a private ruling can help mitigate these risks.