Private ruling: Goods and Services Tax and the sale of land by an enterprise
Published: November 2014

Ruling: Q1: Is the sale of the vacant land subject to Goods and Services Tax? | A1: No. Based on the facts provided, your supply of the land is not a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). The sale was not made in the course or furtherance of an enterprise as defined by section 9-20 of the GST Act. This is because the sale of the land was an isolated transaction and merely the realisation of a private capital asset. Your remaining questions regarding GST registration and using the margin scheme are therefore not relevant.

Relevant facts and circumstances: • You are not registered for Goods and Services Tax (GST). • You and your spouse are employed. • You jointly purchased the residential property. (Residential premises) with your spouse. • The property included residential premises on one title and 1500 square meter block, separately titled (block). • The block contains many trees, plants and a large amount of grassy areas and an in ground pool, the block did not suit your needs • The previous owner would only sell the residential premises and the block together • You purchased both blocks with the intention of living in one and selling the other. • You arranged for a friend to purchase the block with the intention of being your future neighbor. • You established the block price based on a broad market value • Within a month of the purchase of land, you entered into a contract to sell the block to a purchaser.

Relevant legislative provisions: 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