Private ruling: GST and sale of property
Date of advice: 10 December 2020
Published: March 2021
Ruling period: XX October 20XX till quarter ending XX December 20XX
Date scheme commenced: XX October 20XX

Ruling: Q1: Is the sale of the property (Property) by the Owners a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No For the sale of the Property to be a taxable supply section 9-5 of the GST Act requires that: (a) you make the supply for consideration (b) the supply is made in the course or furtherance of an enterprise that you carry on (c) the supply is connected with the indirect tax zone (Australia) and (d) you are registered or required to be registered for GST. In this case the Owners are not considered to be carrying on an enterprise and are also not registered or required to be registered for GST. Therefore, the sale of the Property will not satisfy the requirements of section 9-5 of the GST Act and the supply will not be a taxable supply.

Relevant facts and circumstances: The Owners are siblings. They jointly own, as tenants in common in equal shares, the Property which consists of vacant land used for grazing. The Owners parents acquired a life interest in the Property and the Owners acquired the interest in remainder as tenants in common. The Owners parents have since passed away and in 20XX the life interest the parents held ended and full interest in the title to the Property was transferred to the Owners as tenants in common as they held the interest in remainder. The Property has, as far as the Owners are aware, been used for grazing stock since prior to 1 July 20XX till now. The Owners have made an application for a multi lot subdivision of the Property, although a permit has not yet been issued. No other development activity has been undertaken on the Property. The Owners entered into a contract for the sale of the Property The Owners are not registered for GST, either jointly or individually. Apart from jointly owning the Property the Owners do not own any other assets jointly and do not carry on a business jointly and are not in partnership together.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 section 9-20 | A New Tax System (Goods and Services Tax) Act 1999 Division 23 | A New Tax System (Goods and Services Tax) Act 1999 section 184-1 | A New Tax System (Goods and Services Tax) Act 1999 Division 188