Private ruling: GST - sale of vacant land
Date of advice: 16 September 2025
Published: 17 November 2025
Ruling period: 1 July 20xx to 30 June 20xx
Date scheme commenced: 1 July 20xx

Ruling: Q1: Will the sale of vacant land at xxxx (Property) by xxxx (you) be a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes. The sale of the Property will be made in the course or furtherance of an enterprise that you carry on and therefore satisfy the requirements of section 9-5 of the GST Act. Consequently, GST will be applicable on the sale of the Property.

Relevant facts and circumstances: You are registered for GST. You were incorporated for the purpose of providing consultancy services to the Information Technology Sector (IT Services). The majority of income that you have derived has been from the provision of IT Services. On or about xxxx, you purchased vacant land at xxxx (Property). The Property was purchased as an investment asset. There have been no plans or intention to develop the Property since the date of purchase and you have not made any applications for plans or permits with the view of property development. The Property was purchased using the personal funds of the Directors which were made by way of interest free loans to you. You advise that the capital loaned to you have been repaid and there is no outstanding liability with respect to the loaned funds. You own one-third of a rental property at xxxx (Rental Property). No development works have been conducted on the Rental Property since the date of purchase. The only works performed have involved maintenance and repairs as required. From xxxx, you commenced using the Rental Property for holiday rental purposes. It has been rented for holiday accommodation and does not have full time tenants. The Rental Property is advertised on Airbnb for the entire calendar year. Tenancy days therefore varies depending on demand from the marketplace. You have not derived income from IT Services since on or about xxxx. GST registration has been maintained as the directors will make a decision to enter into IT related contracts if and when available and if it suits the business goals of the company at the time. As a consequence, GST registration has been maintained as most entities involved in IT who engage entities for IT services require the contracting entities to be registered for GST as part of the contractual arrangements. You have not been involved in any previous property development activities.

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 section 195-1

Reasons for decision: Summary: Section 9-5 of the GST Act sets out the requirements of a taxable supply and it states: You make a taxable supply if: a) you make the supply for *consideration; and b) the supply is made in the course or 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 for GST. However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed. (* denotes a term defined in section 195-1 of the GST Act.) There are no provisions in the GST Act under which the sale of the Property would be GST-free. There are also no provisions in the GST Act allowing the sale of vacant land to be input taxed. This is supported by Goods and Services Tax Ruling GSTR 2012/5 Goods and services tax: residential premises (GSTR 2012/5) under paragraph 47 which states: 47. Vacant land is not capable of being occupied as a residence or for residential accommodation as it does not provide shelter and basic living facilities. Vacant land is not residential premises. In your case, you will meet the requirements of paragraphs 9-5(a), 9-5(b) and 9-5(c) of the GST Act as: • you will sell the Property for consideration; • the sale of the Property will be connected with Australia as the vacant land is in Australia; and • you are registered for GST. Therefore, to determine if the sale of the Property is a taxable supply under section 9-5 of the GST Act, it must be established whether your sale of the Property will be a supply made in the course or furtherance of an enterprise that you carry on. Enterprise Section 9-20 of the GST Act defines 'enterprise' to include, amongst other things, an activity or series of activities done: • in the form of a business • in the form of an adventure or concern in the nature of trade • on a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property. The term 'carrying on an enterprise' is defined in the GST Act and includes doing anything in the course of the commencement or termination of the enterprise. Miscellaneous Taxation Ruling 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) considers the meaning of 'enterprise' for the purposes of entities' entitlement to an Australian business number (ABN). 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? confirms that the principles in MT 2006/1 apply equally to the term enterprise for GST purposes. An entity can carry on more than one enterprise. On the facts provided, you are carrying on an enterprise in relation to the IT Services you provide and a leasing enterprise in relation to the Rental Property. Where an entity is registered for GST, the GST registration applies to all the enterprise activities carried on by the entity. 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. Federal Commissioner of Taxation v. Swansea Services Pty Ltd [2009] FCA 402; [2009] ATC 20-100 ( Swansea ) deals with the issue of enterprise. McKerracher J stated the following in the decision: • there is nothing in the GST legislation that indicates investment activities cannot amount to an enterprise (paragraph 63), • the scope of the definition of enterprise is wide - one activity alone may qualify as an enterprise (paragraph 64), • the Explanatory Memorandum of the GST Act also indicates that enterprise is to be viewed widely (paragraph 67), and • enterprise is a broader concept than carrying on a business. The GST Act does not stipulate that there must be regular sales for an enterprise to exist (paragraphs 68-69). From the time of purchase, you have held the Property as an investment asset. You have held the Property with the intention of realising a profit or gain from the appreciation in value of the vacant land. In Swansea , it was noted that the GST legislation does not preclude investment activities from amounting to carrying on of an enterprise. Although no two cases are the same, applying the view of McKerracher J in Swansea , it is arguable that your investment activity in relation to the Property can constitute an enterprise in itself. The phrase 'in the course or furtherance of' is not defined in the GST Act. The Explanatory Memorandum to the A New Tax System (Goods and Services Tax) Bill 1998 supports a broad meaning of the phrase 'in the course or furtherance of'. Paragraph 3.10 states: 3.10 In the course or furtherance is not defined but is broad enough to cover any supplies made in connection with your enterprise. An Act done for the purpose or object of furthering an enterprise, or achieving its goals, is a furtherance of an enterprise although it may not always be in the course of that enterprise. In the course or furtherance does not extend to the supply of private commodities, such as when a car dealer sells his or her own private car. See Case N43 (1991) 13 NZTC 3361. Therefore, in the given circumstances, even upon a finding that the single action that you undertook by holding on to the Property as a long-term investment asset since the time of purchase and then selling it, may not amount to a separate enterprise, the Property remains an asset of an enterprise that you carry on. The profits from the sale of the Property would benefit you and the sale would contribute to the furthering of the overall enterprise carried out by you. Further, where you are registered or required to be registered for GST, the disposal of a capital asset in Australia in the course of carrying on your enterprise, is a taxable supply and you are required to account for GST on that sale. Relevantly, Footnote 104 and 106 of MT 2006/1 states: [104] Note however that where there is an enterprise registered for GST purposes, the supply of investment assets or non-trading assets in the course or furtherance of an enterprise would still form part of the enterprise activities, see section 9-5 of the GST Act. ... [106] 97 ATC 5135; (1997) 151 ALR 242; 37 ATR 358. Further to footnote 104, isolated sales of land by an enterprise already registered for GST would be subject to GST. Consequently, the sale of the Property is made in the course or furtherance of an enterprise that you carry on and paragraph 9-5(b) of the GST Act is satisfied. As all the requirements of section 9-5 of the GST Act are met, the sale of the property is a taxable supply and therefore, GST is payable on the sale.