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PLAYLIFE(Newbie)Newbie
24 Oct 2025

I would like to purchase a property that per the Contract of Sale is a 'Farming Business' and that the price is GST inclusive.


The contract does not contain information regarding the utilisation of the Farming Land exemption, nor the basis on which it is claimed.


Question 1

Is there scope for any GST that arises from an ATO review or audit assuming they consider the exemption is not available and GST should have been paid?


Question 2

As the Purchaser, am I at risk for paying GST?

194 views
1 replies
194 views
1 replies

All replies

JayATO(Community Support)Community Support
29 Oct 2025

Hiya @PLAYLIFE,


As the purchaser, you generally don't have GST liability if the seller incorrectly claims the farming exemption. The GST obligation typically sits with the seller who makes the supply.


However, there are some exceptions. You may need to withhold GST at settlement if you're purchasing certain types of property like new residential premises or potential residential land.


For farmland to be GST-free, it must have been used for farming for at least 5 years before the sale, and you must intend to use it for farming. The seller should provide written notice about any withholding obligations before settlement.


If you're concerned about the exemption's validity, consider seeking clarification from the seller about the property's farming history and intended use.

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