Private ruling: GST and property
Date of advice: 15 March 2016
Published: May 2016

Ruling: Q1: Are your supplies of vacant lots at specified address taxable supplies under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No, your supplies of vacant lots at specified address are not taxable supplies under section 9-5 of the GST Act. Your sales are not in the course or furtherance of an enterprise and therefore are not taxable supplies.

Relevant facts and circumstances: You are not registered for GST. You and your spouse originally purchased the land and built the family home on it in specified year. Your family lived on this property since specified year. Before retirement, you worked and then raised your children. Your spouse worked as specified occupation before resigning and establishing a specified business. In specified year your spouse transferred their 50% ownership interest in the property to you due to liability concerns with the specified business that they established. Your spouse retired fully from their business in specified year. You and your spouse are in your specified number and wish to reduce the time you spend maintaining the property. Your children are grown up and they have no use for the land. You want to raise funds to provide for your retirement. You wish to subdivide the property into specified lots, with your existing home occupying one of the lots. You and your spouse are not engaged in the business of subdivision of land, and have not previously conducted a subdivision of land. You have appointed a Project Manager to manage the project and it will be the project manager's responsibility to engage the contractors, deal with council, and other statutory authorities. The development will be to the absolute minimum that council requires before it grants the titles. It is proposed that the development occur as a single stage development. You will not be involved in selling the lots because a local real estate agent has been appointed to handle all of the marketing and sales. You will not work on the development, beyond keeping the books to understand how much it is costing. There will not be a site office, secretary, nor any business letterhead. There are no buildings on the land to be subdivided and sold, except for the existing home. You and your spouse will continue to live in your existing house. You do not carry on any other enterprise.

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