Private ruling: GST - sale of property
Date of advice: 8 August 2025
Published: 27 October 2025
Date scheme commenced: <date>

Ruling: Q1: Will the sale by the co-owners of the property described in the facts be a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes This private ruling applies for the following periods: <date> - <date>


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 9-10 | A New Tax System (Goods and Services Tax) Act 1999 section 9-15 | A New Tax System (Goods and Services Tax) Act 1999 section 9-20 | A New Tax System (Goods and Services Tax) Act 1999 section 23-5 | A New Tax System (Goods and Services Tax) Act 1999 section 23-15(1)(a) or (b) | A New Tax System (Goods and Services Tax) Act 1999 section 188-10(1) | A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision: Summary: The parties to this ruling are collectively acting as a general law partnership for GST purposes in making the sale of the <name> property. All parties are acting jointly in the pursuit of income under an enterprise conducted by the partnership given that it is engaged in an adventure in the nature of trade or profit-making undertaking or scheme. The partnership is required to be registered for GST as it made supplies exceeding the projected turnover threshold. The sales will be new residential premises, and this supply is subject to the GST at settlement provisions of Schedule 1 of the Taxation Administration Act 1953 . | Detailed Reasoning - Detailed reasoning: In this ruling, • unless otherwise stated, all legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 • all legislative terms of the GST Act marked with an asterisk are defined in section 195-1. • all reference materials, published by the Australian Taxation Office (ATO), that are referred to are available on the ATO website ato.gov.au The definition of 'residential premises' in section 195-1 refers to 'land or a building that is occupied as a residence or is intended to be, and is capable of being, occupied as a residence'. Because of the definition, for land to be residential premises, there must be a building on the land that has the physical characteristics of a residence. Paragraph 40-75(1)(a) states amongst other things that residential premises are 'new residential premises' where they have not previously been sold as residential premises or have previously been the subject of long-term lease. Under subsection 40-75(2) residential premises are not new residential premises, as defined in subsection 40-75(1)(a), if for a period of five years they have only been used to make input taxed supplies because of section 40-35(1)(a). Under subsection 40-75(2) residential premises are new residential premises, as defined in subsection 40-75(1), if they: a) have not previously been sold as residential premises and have not previously been the subject of a long-term lease; or b) have been created through substantial renovations of a building; or c) have been build or contain a building that has been built to replace demolished premises on the same land. The property will be considered 'new residential premises' as defined in the GST Act as you have not rented it for any period, whereas subsection 40-75(2) requires that it be rented continuously for five years to prevent the sale as new residential premises. Where a supply of real property that is new residential premises it is, prima facie, a taxable supply where the conditions of section 9-5 are met. Whether the sale of the property in this case is taxable depends on whether those section 9-5 conditions are met. Section 9-5 sets out the conditions determining whether a taxable supply is made: You make a taxable supply if: a) you make the supply for *consideration; and b) the supply is made in the course for furtherance of an*enterprise that you *carry on; and c) the supply is *connected with the indirect tax zone; and d) you are *registered or *required to be registered. However, the supply is not a taxable supply to the extent that it is *GST-free or input taxed. There is no doubt that there was a supply for consideration satisfying paragraph 9-5(a), and the supply was made in the indirect tax zone (Australia) meeting paragraph 9-5(c). Additionally, there are no provisions making the supply of the new residential premises GST-free as the supply is not a going concern nor of farmland. The supply is not input taxed as it is 'new residential premises' as defined under section 40-75 but is only a taxable supply if the conditions of a taxable supply are met. The remaining elements of 9-5 to be addressed are: • Who is 'you' set out in the opening sentence of 9-5 that makes the supply? • Whether the supply is made in the course of an enterprise you carry on; and • Whether you are required to be registered for GST. | Detailed Reasoning - Who is 'you' referred to in section 9-5?: This part of the provision identifies the entity making the taxable supply if all the conditions are met. In this case, the supply is the sale of real property being, the <name> property once you completed construction and the sale of land contract. 'You' is defined in section 195-1 as: you: if a provision of this Act uses the expression you, it applies to entities generally, unless its application is expressly limited. Note: The expression 'you' is not used in provisions that apply only to entities that are not individuals. 'You' appears in paragraph 9-5(a): 'you make a supply' and 'you' is also connected to any identifiable enterprise and in the course or furtherance of whose enterprise are the supplies being made under paragraph 9-5(b). Additionally, 'you' is tied to the entity that is registered or required to be registered. Section 184-1 sets out the definition of 'entity': 184-1 Entities (1) Entity means any of the following: (a) an individual. (b) a body corporate. (c) a corporation sole. (d) a body politic. (e) a *partnership. (f) any other unincorporated association or body of persons. (g) a trust. (h) a *superannuation fund. For brevity we can dispense with assessing whether they were better described as a body corporate; a corporation sole; a body politic; a trust; or a superannuation fund. These do not best fit the description of the relationship between the parties for GST purposes. We take the view it is best to narrow the discussion to the entities most likely to fit both the form and substance of the arrangement the parties entered. Unincorporated association or body of persons is discussed in Miscellaneous Tax Ruing MT 2006/1 The New Tax System: the meaning of entity carrying on an enterprise for the purposes of entitlement to an Australian Business Number (MT 2006/1). The features are set out in para 50 citing Conservative and Unionist Central Office v. Burrell (Inspector of Taxes) [1980] All ER 42 at 58. It sets out some of the characteristics of an unincorporated association or body of persons considered in that case: • there are members of the association. • there is a contract binding the members amongst themselves. • there is a constitutional arrangement for meetings of members and for appointing officers. • the members will normally be free to join or leave the association. • the association will normally continue in existence independently of any change to the composition of the association; and • as a matter of history, there will have been a moment in time when a number of persons combined to form the association. However, not all of these characteristics need to be present. The parties prior to becoming vendors of the property made a verbal agreement to act jointly to bring about the purchase, construction and sale of the <name> property. Subsequent to the purchase of the property in the names of <letters>, <letters>, <letters>, and <letters> you entered into agreements setting out roles and financing arrangements. By the nature of the arrangement, you were not free to exit at any time, and there was no constitution as such. There is an association of persons, but the motive is profit driven. Additionally, the arrangement is not rules driven such that the rules may be less than an enforceable contract. There is no sharing of output, so the arrangement is not conducted via a joint venture entity. <letters> is a builder and operates that business under the corporate entity <name>. The parties chose <name> as the builder. The agreements and actions between the four participants indicate a purpose and intention providing evidence of mutuality and an association between the parties. Principally the Interest Liability Agreement shows a clear purpose to share the expenses and in practice, a joint account was established strengthening the proposition that the entity making the supplies is centred around acting jointly to pursue common profit or income to be distributed from a singular bank account for the project. The evidence does not point to the parties acting within their own separate enterprises. There is no evidence suggesting that the participants were a superannuation fund. The remaining entity type for analysis is 'partnership'. | Detailed Reasoning - Are the parties making supplies as a partnership?: The term 'partnership' is defined by section 195-1 of the GST Act to have the meaning given by section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997). Section 995-1 of the ITAA 1997 defines a partnership to mean: (a) an association of persons (other than a company or a limited partnership) carrying on business as partners or in receipt of ordinary income or statutory income jointly; or (b) a limited partnership. This definition of partnership is wider than at common law. The first limb of the definition in paragraph (a) reflects the definition of partnership contained in State and Territory Partnership Acts. The second limb of the definition in paragraph (a) extends 'partnership' for taxation purposes to include persons in receipt of income jointly. It is not a limited partnership as the liability between the participants is shared and not restricted to the capital contributions of each partner. Limited partnerships must be registered under the Limited Partnerships Act 2016 . A partnership within the extended meaning for taxation purposes exists, for example, where two or more persons derive income from real estate that they own as joint tenants or as tenants in common. It is an entity in its own right as it is a partnership for the purposes of the A New Tax System (Australian Business Number) Act 1999 . It has also been held that the contract between the members will be based on rules that set out obligations and confer rights on members. The rules can fall short of a legally enforceable contract between members. MT 2006/1 at paragraphs 56-57 provides an apt example of where a partnership may exist rather than a non-entity joint venture under similar facts to this case: Example 4 - an entity that is not a non-entity joint venture 66. Mara and Lauren go into business together to buy a block of land jointly and to build a block of units with a view to making a profit. They enter into an agreement to share the profit on sale of the units and to employ a real estate agent to market the units. 67. Mara and Lauren have created a partnership to undertake the activities. The partnership is an entity. It is not a non-entity joint venture as each of them takes a share of the profits generated by the venture. The appropriate entity that is making the supply is a general law partnership where there is an association of persons carrying on a business. At paragraph 21 of Goods and Services Tax Ruling GSTR 2004/6 Goods and services tax: tax law partnerships and co-owners of property (GSTR 2004/6) it makes the point that 'association' is not defined in the legislation. The ordinary meaning is set out there: ' 1. an organisation of people with a common purpose and having a formal structure; 5. connection or combination'. That is there must be a link or existence of common purpose between the parties. Under a general law partnership that association occurs via an agreement written or oral: see Goods and Services Tax Ruling GSTR 2003/13 - Goods and services tax: general law partnerships , paragraph 16. How and when a general law partnership is formed is determined by the facts indicating when the partners commenced carrying on an enterprise. Where no partnership agreement is entered, the intention of the parties evidenced by their conduct including the manner in which they deal with each other and with other parties amongst other factors is key. GSTR 2003/13 at paragraph 18 indicates this could be when the parties register a business name or open bank accounts. There must be 'mutual assent'. This is evidenced by agreements the parties entered into that govern key issues of finance and debt management. If the parties had indicated that they did not intend to form a partnership, they could have mutually agreed to not to form a partnership and importantly altered how liability is determined. The facts suggest the parties intended a partnership outcome. You had a joint bank account for expenses. Also, the existing documentation of relevance include the Development of Land Agreement (DOLA) and its variation agreement. The agreement identifies all four participants as parties. The DOLA sets out conditions precedent at clause 2 set out in the facts above show that the parties did not wish to be in a legally binding relationship until the property had been acquired with all four participants as the registered proprietors and acquire the services of a building contractor. Once the parties satisfied these, it is reasonable to conclude this is the approximate starting point for the partnership. The DOLA sets out covenants indicating equal financial contribution to costs associated with the acquisition and holding of the land. An additional covenant is that the parties retain a builder and share those costs equally per clause 3 of the DOLA. The DOLA at Clause 3(c) also provides for action once practical completion is affected. Principally it states that the property 'is to be listed for sale and sold in accordance with Schedule one. It requires insurance of the building and agreement by all about the agent and commissions. The plan was sale within 45 days of completion but provided a fall-back position if a sale could not be reached, the property will be leased for less than 12 months. However, this never occurred and practical completion was <date>, and the sale settled on <date>. The parties also entered into the Joint Agreement as to Interest Liability (the joint liability agreement) which ensured that despite the <name> Bank facility as a liability only in the <name>, the liability was extended to all parties to the DOLA. The DOLA was varied under a Deed of Variation, which changed way the profits were calculated. The profits, however, were shared equally in keeping with each partners share in the venture. Considered together all documents you jointly executed show that the parties intended to operate as a partnership from its inception being at least when the property was in all four names and the conditions precedent had been addressed. The partnership was to continue at least until settlement of the sale of the property had occurred and the proceeds divided in the manner as set out in the Variation Deed to the Land Development Agreement. On this basis, we consider the 'you' referred to in section 9-5 is in this case a partnership, constituted by its four members. | Detailed Reasoning - Are you making a supply in the course or furtherance of enterprise?: Section 9-20 relevantly defines 'enterprise' to include an activity, or series of activities done: (1) An enterprise is an activity, or series of activities, done: (a) in the form of a *business; or (b) in the form of an adventure or concern in the nature of trade; or (c) on a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property; or ... Section 195-1 states that the phrase 'carrying on' in the context of an enterprise includes 'doing anything in the course of the commencement or termination of the enterprise'. This definition ensures that activities done in the course of the commencement or termination of the enterprise are included in determining whether the activities of the entity amount to an enterprise. The meaning of 'enterprise' is considered in MT 2006/1 and in Goods and Services Tax Determination GSTD 2006/6 Goods and services tax: does MT 2006/1 have equal application to the meaning of 'entity' and 'enterprise' for the purposes of the A New Tax System (Goods and Services Tax) Act 1999? (GSTD 2006/6) which provides that the discussion on 'enterprise' in MT 2006/1 applies to the GST Act. Paragraph 159 of MT 2006/1 discusses how to determine the extent to which an activity or a series of activities amounts to an enterprise: 159. Whether or not an activity, or series of activities, amounts to an enterprise is a question of fact and degree having regard to all of the circumstances of the case. Furthermore, paragraph 160 of MT 2006/1 discusses the need to identify all the relevant activities in order to determine the existence of an enterprise: 160. It is important that the relevant activity or series of activities are identified in order to determine whether an enterprise is being carried on. This is because one activity may not amount to an enterprise, but that activity taken into account with other activities may form an enterprise. All activities need to be taken into account including activities from the commencement to the termination of the enterprise. For further information on commencement and termination activities, see paragraphs 120 to 148 of this Ruling. Consequently, the relevant activities are the activities associated with the purchase of the <name> Property, its construction, the marketing and eventual sale. Firstly, is it necessary to consider whether your activities are in the form of a business. | Detailed Reasoning - In the form of a business: Section 195-1 provides that a 'business' includes any profession, trade, employment, vocation or calling, but does not include occupation as an employee. Paragraphs 170 to 232 of MT 2006/1 discuss factors to consider when determining whether an activity or series of activities are done in the form of a business. Specifically, paragraphs 177 to 179 of MT 2006/1 discuss the main indicators of carrying on a business, with reference to the principles in TR 97/11: Indicators of a business 177. To determine whether an activity, or series of activities amounts to a business, the activity needs to be considered against the indicators of a business established by case law. 178. TR 97/11 discusses the main indicators of carrying on a business. Based on that discussion some indicators are: a) A significant commercial activity b) A purpose and intention of the taxpayer to engage in commercial activity c) The activity is or will be profitable d) The recurrent or regular nature of the activity e) The activity is carried don in a similar manner to that of other businesses in the same or similar trade f) Activity is systematic, organised and carried on in a businesslike manner and records are kept g) The activates are of a reasonable size and scale h) A business plan exits i) Commercial sale or product and j) The entity has relevant knowledge or skill. 179.There is no single test to determine whether a business is being varied on. Overall, the facts of the case suggest that the indicators set out in paragraph 178 of MT 2006/1 are present to a sufficient degree to warrant the conclusion that you are carrying on a business and thereby an enterprise. The activity is significant given the sale price of over <amount>, the level of risk in entering into an arrangement where you borrowed funds and used a common entity type for conduct being a partnership. Your purpose and intention were to purchase vacant land and construct a two-storey residence with a pool. At no stage did you consider renting the property as an investment, but your stated intention was to sell the property for a profit, which occurred as predicted in your estimates which are a valid business plan. The sale was made through agents on a commercial basis, and you shared the costs between you. You engaged consultants as required including the builder, real estate agents and conveyancers. The documentation you entered into such as the Land Development Agreement and its subsequent variation are all commercial in character. Additionally, you had a business plan indicating profit levels depending on price points. We consider that amongst the activities set out above, the purchase, build, marketing and sale of the <name> Property does display the majority of the indicators of a business. However, the process does indicate low repetition as the partnership only developed a single property. | Detailed Reasoning - In the form of an adventure or concern in the nature of trade: Paragraph 234 of MT2006/1 distinguishes between activities done in the form of a 'business' and those done in the form of 'an adventure or concern in the nature of trade'. 234.Ordinarily, the term 'business' would encompass trade engaged in, or a regular or continuous basis. However, an adventure or concern in the nature of trade may be an isolated or one-off transaction that does not amount to a business, but which has the characteristics of a business deal. The commercial nature of a transaction or scheme is significant in determining whether the activities are done in the form of an adventure or concern in the nature of trade. This is further explained in MT 2006/1. 237. The term 'profit-making undertaking or scheme' like the term 'an adventure or concern in the nature of trade' concerns transactions of a commercial nature which are entered into for profit-making but are not part of the activities of an on-going business. Both terms require the features of a business deal, see McClelland v. Federal Commissioner of Taxation, in which Lord Donovan, delivering the opinion of the majority said: It seems to their Lordships that an 'undertaking or scheme' to produce this result must - at any rate where the transaction is one of acquisition and resale - exhibit features which give it the character of a business deal. It is true that the word 'business' does not appear in the section but given the premise that the profit produced has to be income in its character their Lordships think the notion of business is implicit in the words 'undertaking or scheme'. Paragraph 244 of MT 2006/1 further explains that an adventure or concern in the nature of trade includes a commercial activity that does not amount to business, but which has the characteristics of a business deal are of a revenue nature. As a result, we consider that you were engaged in a property development enterprise as your activities were in the form of a business under paragraph 9-20(a). Alternatively, we consider that your activities were an enterprise as they were in an adventure in the nature of trade under paragraph 9-20(b). Under either limb you were engaged in an enterprise and consequently the requirement of the taxable supply definition under paragraph 9-5(b) was met. | Detailed Reasoning - Registration: The final factor for consideration is whether you are required to be registered as required by paragraph 9-5(d). Registration under section 23-5 provides that you are required to be registered for GST if: Subsection 188-10(1) provides that you have a GST turnover that meets the registration turnover threshold if: The sale of the property should have been included in the turnover figures for the partnership. At the point you marketed the property for sale, it should have been included in your projected turnover calculations. At that stage the sale exceeded the turnover threshold, and the partnership should have been registered prior to the sale because the projected GST turnover would have been in operation per section 188-20 which states: (1) Your projected GST turnover at a time during a particular month is the sum of the * values of all the supplies that you have made, or are likely to make, during that month and the next 11 months, other than: (a) supplies that are *input taxed; or (b) supplies that are not for *consideration (and are not *taxable supplies under section 72-5); or (c) supplies that are not made in connection with an *enterprise that you *carry on. ... As you did not make an input taxed supply, the supply was for consideration of over <amount> and as established above, the supply was in the course of your enterprise, the sale is included in your turnover calculation. Section 188-25 sets out that supplies made of capital assets or supplies made as a consequence of ceasing to carry on an enterprise or substantially and permanently reducing the size or scale of the enterprise are to be disregarded. Previously in the matter of Ian Mark Collins & Mieneke Mianno Collins ATF, The Collins Retirement Fund and Commissioner of Taxation [2022] AATA 628 (Collins), the question was raised whether section 188-25 applies where a property developer sells property as trading stock and thereby substantially reduces the size and scale of their enterprise. The Administrative Appeals Tribunal as it then was, via SM Olding stated that the purpose of paragraph 188-25(b) is to exclude from calculation the value of projected supplies that are outside the usual run of transactions which, if included, would distort an assessment of the scale of an entity's enterprise. The Tribunal found at [73] and [77] that the sale of land is the central objective of a land development enterprise, and the sales were made in the course of and as a consequence of the applicant carrying on the enterprise, not as a consequence of ceasing, or a reduction in the size or scale of, that enterprise. The Tribunal considered at [78] that the applicant's approach under either limb of paragraph 188-25(b) would mean that land developers could escape GST on land sales transacted in the ordinary course of their business as being made solely as a consequence of ceasing or substantially and permanently reducing the size or scale of their enterprise. As a result, you were required to be registered at the time when you began marketing the property for sale and section 9-5(d) is met. However, you could voluntarily backdate the registration to a tax period where the project enterprise was in serious contemplation. Accordingly, all the taxable supply requirements are met, and you made a taxable supply of the <name> property in the tax period the property settled. | Detailed Reasoning - Conclusion: As section 9-5 has been satisfied, you meet all the requirements of a taxable supply. Therefore, the sale of the <name> property situated at <address>, is a taxable supply pursuant to section 9-5 and GST is payable on that supply.

<name>, your wife <name>, with another married couple <name> and <name> (you) decided to purchase a vacant residential block of land known as <address> also described as <number> on Plan <number> in the Town of <name> with the intention to build a house to sell for a profit to be shared between you. | There was no written partnership agreement. You verbally agreed to start this project when purchasing the vacant land, but you formalised a written land development agreement document once you were in possession of the land. | You jointly executed the following documents: | • Contract for sale of land or strata title by offer and acceptance dated <date> (the acquisition contract). | • Development of Land Agreement dated <date> | • Joint agreement as to interest liability dated <date>. | • Western Australia practical completion certificate dated <date>. | • Deed of Variation <date>; and | • Contract for sale of land or strata title by offer and acceptance dated <date> (the sale contract). | In addition to the abovementioned documents, you were set out as the owner in the development approval application <number> lodged by the builder, <name> with the town of <name>. Notice of the DA approval was issued on <date>. | Purchase and development of <name>: On <date> you entered an agreement to purchase the vacant <number> m 2 <name> property; it was zoned for residential use. The purchase price was <amount>. All four of you are listed on the Certificate of Title as registered proprietors. <letters> and <letters> are certified as joint tenants in 1/2 share, and <letters> and <letters> hold as joint tenants in 1/2 share as Tenants in Common. | An email from <letters> to <letters> dated <date> contains the feasibility excel spreadsheet highlighting a return on investment analysis. This spreadsheet was prepared by <letters> and <letters> showing three sale scenarios <amount>, <amount>, and <amount>) and the costings and percentages of the contributions for each party in order to complete each possible build for sale and potential profit at each sale point. | You had no intention to ever rent or lease the property. | You decided to use the services of <letters> construction business, <name> (the builder) to perform all relevant construction activities connected with the venture to its completion and sale. <letters> and <letters> managed the build and bookkeeping of the project, and <letters> and <letters> financed their portion of the development project. | On <date> all parties signed the Development of Land Agreement, formalising ownership being one hundred percent of the residential property effectively allocating each individual's interest. Each participant is listed as a party and is defined as such in the definition clause of the Development of Land Agreement. The relevant provisions are: | (a) This Agreement, with the exception of this clause 2, is subject to, and conditional upon, the following occurring before <date>. | (i) the purchase and transfer of the Land, with each of the parties being registered as proprietors of the Land in equal shares; and | (ii) the Parties entering into a building contractor to construct a dwelling on the Land, as contemplated by clause 3(b) of this Agreement. | (b) If the Conditions Precedent are not satisfied by the date specified in clause 2(a) of this Agreement, or another date agreed in writing by the Parties, then a Party will be entitled to terminate this Agreement by notice in writing to the other Parties. | (i) make appropriate applications. | (ii) diligently pursue those applications; and | (iii) do everything, necessary or convenient to satisfy the Conditions Precedent. | The Parties agree to the following covenants: | (a) the Parties will purchase the Land, for a purchase price and on terms and conditions agreed by each of the Parties, on the basis that each of the Parties: | (i) will contribute equally to the purchase of the Land, including all incidental costs. | (ii) will be registered as proprietors of the Land in equal shares; and | (iii) will bear all ongoing costs associated with the Land during the term of this Agreement in equal share. | (b) the Parties will engage a building contractor to build a dwelling on the Land, with the relevant building contract to be entered into by each of the Parties by no later than <date>, on the basis that each of the Parties: | (i) must agree on the building contractor to be engaged. | (ii) must agree on the building works to be carried out by the building contractor; and | (iii) will bear all ongoing costs associated with the building works in equal share; and | (c) upon practical completion of the dwelling, the Parties agree that the Land is to be listed for sale and sold in accordance with the provisions set out in Schedule 1 of this Agreement, on the basis that each of the Parties bears all costs incurred, and revenue received, under those provisions in equal share. | Schedule 1 - Sale of Land Provisions: 1. The Land is to be sold upon 'full site completion'. Full site completion being building contract completed by builder resulting in the 'handover' of the homes keys from contractor, painting and flooring completed, external finishings completed inclusive of driveway, alfresco and porch ground aggregate/paving, pool install, reticulated lawn and landscaping. | 2. Upon practical completion by the building contractor, dwelling to be insured with a registered insurance agent for replaceable building value as deemed by bank holding mortgage over property. | 3. A real estate agent is to be appointed to market the Land for sale upon full site completion. All parties to reach mutual agreement when contracting selling real estate agent and negotiated sales commission percentage. | 4. The Land & building is to be 'marketed to be sold' to a third party within forty-five days of full site completion. | 5. The Parties must agree on a minimum sale price for the Land. If the Parties cannot agree on a minimum sale price for the Land, the Parties must appoint an independent land valuer to nominate an appropriate sale price for the Land. | 6. If the Land does not have an unencumbered offer to purchase by third party (within ninety days of first home open) of at least twenty percent greater than costs including land purchase and associated costs and building costs to 'full site completion' then parties to contract may mutually agree to temporarily remove sale of house from market. Parties then may mutually agree to lease (rent) newly built abode to a third party for a period less than but not greater than twelve months. Unencumbered offer' meaning an offer which is not conditional upon 'subject to sale of the offeror's own home, investment or business interest' as a condition on the written 'Contract for Sale by Offer and Acceptance' | 7. If first attempt to market property for sale does not result in an unencumbered sale, within twelve months of first attempt to receive an 'unencumbered offer' to purchase by third party, all parties are in agreeance to engage a mutually agreed real estate agent (in agreeance with the conditions of point four) to offer the newly built abode on <address>, for sale on the market for the second time. | 8. All parties in agreeance, upon second attempt to market, if the sale process of the new abode receives an offer for more than the 'full purchase price and associated costs to completion', the parties can agree to sell at the best possible contract price and terms on offer at the time of the second attempt to market. The second attempt to market being not longer than ninety days from the 'second attempt to market', first home open | 9. Upon second attempt to market for sale, all parties to be in agreeance, section eight will stand unless all parties to this agreement mutually agree to sell by written agreement after second 'to market' date for an amount lower than twenty percent greater than the full purchase price and associated costs to completion' but not less than the full land, build and site completion costs, within ninety days of second marketing attempt home open. | 10. The Parties will jointly and equally share all proceeds from the sale of Land, less selling and settlement costs equally (equally defined as being 50/50) between them. | 11. After sale of the Land, the contract sale settlement date will absolve all parties of the contract and this contract (Development of Land Agreement - <address> will no longer apply. | 12. All Parties agree to confidentiality regarding the build costs and associated build costs at the Land, inclusive of the building contract with contracted builder and other associated costs with the build. All Parties agree the agreed terms of this Agreement are confidential and shall remain between the two Parties only. | 13. All Parties agree not to verbally negotiate the sale of the Land and Building with a third party outside of this Agreement, prior to the first home open by contracted real estate agent. This Agreement will stand unless the verbal offer by the third party verbalised to one of the parties is one hundred and fifty percent greater than the combined 'land purchase plus associated costs and building contract and associated building costs to 'site completion'. Offer initially verbalised by aforementioned third party is only to be formally considered by both parties to this contract if offered as an 'unencumbered written contract for sale by offer and acceptance' to purchase the new build. | 14. All parties to agree if either party defaults on mortgage payments (interest only) to the mortgage provider (<name>) of the Land, a record will be kept by both parties to this Agreement of the defaulting interest amounts. The total of the defaulted interest amounts by the defaulting party will be deducted from the defaulting parties' fifty percent share of 'net sales proceeds' with the total defaulting interest amounts being paid to the non-defaulting party to this contract at the time of settlement of the sale of the Land. | 15. Settlement agent at time of sale to be nominated and agreed to collectively by both parties. | Funding and Construction of <name> Property: You collectively took out a line of credit to purchase the land and some of the costs associated with the build from the <name> Bank. | Later <letters> & <letters> had applied for an additional loan to assist with subsequent costs but were refused. Consequently, <letters> & <letters> took out a <amount> interest only <name> loan at <numbers>% per annum, but later this increased to <amount>. | Also, <letters> and <letters> used their savings to make progress payments and cover the finishing costs for the building. | <date> you received notification addressed to <name>stating that the application for the plans to build the <name> Property was received and stamped on <date> from the Town of <name>, and your application to commence development was approved. Your builder commenced construction of the swimming pool on <date> which was the first step in the development. | On <date>, you collectively signed the Interest Liability Agreement setting out amongst other things that <letters> and <letters> were to be jointly liable for interest payable on the borrowings and <letters> and <letters> had taken out with the <name> Bank. | The purpose of the Interest Liability Agreement is set out as follows: | Purpose of the Agreement: The purpose of the agreement is to transfer the interest liable on the loan funds intended to fund fifty percent of the construction loan and to market finishing costs of <address> (aforementioned property equally and jointly held between all parties to this agreement) to <name>and <name>. | On <date> the <name> property was completed, and <letters> and <letters> signed a practical completion certificate (Job Ref <numbers>). | On <date> an amendment to the Deed of Variation to the Land Development Agreement was completed and signed by all members covering the profit distribution showing: | • First distribution: <numbers>% of profit capped at maximum of <amount> payable into the nominated bank account of <letters> and <letters>. | • Second distribution: the balance of settlement proceeds after deduction of first distribution to be equally (<numbers>) distributed to <letters> and <letters> <numbers% of residual settlement proceeds. <letters> and <letters> <numbers>% of residual settlement proceed after first distribution deducted. | ' Distribution ' is defined as: | sales proceeds distributed (distributed in its entirety of one hundred percent (100%)) in accordance with the amendment to contract stipulated in this Deed of Variation (Clause 2: Amendments to Contract below). | ' Profit/ Sales Proceeds ' is defined as | the residual dollars remaining after accounting for the sale price of <address> less two-point two percent (<numbers>%) commission to contracted selling agent less building and Associated costs to market (final costs to be itemised in the <address> - owners' Reconciliation). Residual to be calculated as Sale Price less Selling Commission less Building and Associated costs to market. Financing costs including interest and bank fees not included in profit/sales proceeds. | The Land Development agreement by way of the variation deed ends once settlement completed. | Sale of <name>Property: The <name> property was listed on <date> by <name>. It consists of five bedrooms, three bathrooms, two car spaces, two-car garage and an in-ground pool. It was sold for <amount>with settlement on <date>. | On the Contract of Sale, under the heading of GST Withholding question 1 - ' Is this contract concerning the taxable supply of new residential premises or potential residential land as defined in the GST Act? ' initially the box for 'yes' was ticked. However, this was crossed out and six initials were marked above the change. The 'no' box was not marked. None of the members have withheld any GST for this sale. The contract states that if no indication is made in either the yes or the no box, the answer is deemed to be no, and no payment is required under section 14-250 of Schedule 1 of the Taxation Administration Act 1953 . | Financial settlement of the project: <letters> & <letters> provided a financial excel spreadsheet showing the financial settlement of the sale of the <name> property. | The Settlement Proceeds equated to: | • Sale of property <amount> | • Total settlement costs <amount> | o Money attributable to build - <name> <amount> | o Final variation to contract and extra costs to market (<letters> & <letters>) <amount> | o Money attributable to build (principal already paid) -<name><amount> | • Total residual settlement funds after commitments paid out <amount> | • Owners' settlement proceeds as agreed: | o <numbers>% to <name>for construction <amount (first deduction) | o <numbers>% to <name> <amount> | Only <letters> and <letters> have requested this ruling; <letters> and <letters> were invited to be co-ruling applicants but declined. | <letters> and <letters> initially took advice from <letters> and <letters> tax agent not to register for GST and to date, no GST nor remittance has been on the sale proceeds. | <name>occupation is stated as accountant in the Development of Land Agreement. <letters> is a registered builder. | <name>occupation is stated in the Development of Land Agreement as a teacher. | <letters> and <letters> have not had any prior building enterprise engagement. | You never rented out <name> property nor advertised it for rent or lease and you sold it on <date>. | <name>has been registered for GST since <date>. | Reasons for decision: These reasons for decision accompany the Notice of private ruling for <name>and <name>. | This is to explain how we reached our decision. This is not part of the private ruling. | you are carrying on an enterprise, and | your GST turnover meets the GST registration turnover threshold, which is currently $75,000 for entities other than non-profit entities. | your current GST turnover is at or above the registration turnover threshold, and the Commissioner is not satisfied that your projected GST turnover is below the registration turnover threshold, or | your projected GST turnover is at or above the registration turnover threshold.