Private ruling: GST and the sale of property
Date of advice: 4 October 2016
Published: November 2016

Ruling: Q1: Is GST payable on the transfer of the title to a block of land to a purchaser (who happens to be a property developer) which has been created though a subdivision of a family owned private property? | A1: No, GST is not payable by you on the transfer of the title to a block of land to a developer. You are not disposing this land in the course or furtherance of an enterprise that you are carrying on and thus, does not meet one of the requirements of the definition of a taxable supply as outlined in section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). Additional information There may be GST consequences arising for entities who, in the course of their enterprise undertake work for no monetary consideration (but there is non-monetary consideration attributable to their work). Accordingly, the Developer may have a GST liability for the subdivision work if they meet the requirements of a taxable supply even though he may not have received monetary consideration for the work from you. However, given that he is not a party to this ruling request we are unable to comment on this further.

Relevant facts and circumstances: You and your family have subdivided your family property into several lots. The title of some of these lots has been transferred to a developer who has undertaken the subdivision work on-behalf of you. Neither you nor your family will be paying any monetary consideration to the developer for the works that he has undertaken in subdividing the property on behalf of you and your family. The extent of the subdivision will be limited to the bare minimal that is required by the relevant council. You and your family are not property developers. You have not engaged in any property development activities in the past. Neither you nor your family held the Property for any profit making purposes.

Relevant legislative provisions: Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999