Private ruling: GST - subdivision of land
Date of advice: 7 July 2025
Published: 1 September 2025
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is your supply of the subdivided lots (Lots) from the property a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes. | Q2: Is any portion of the sale proceeds from the supply of the Lots included in your assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A2: Yes.

Relevant facts and circumstances: You are not registered for GST. On xxxx, you purchased a property located at xxxx (Property). At the time of purchase there was house and shed on the Property. The Property was purchased with the intention of acquiring land to enable grazing and riding space. In xxxx, you were approached by a group of neighbours who asked for money towards supporting their application to change the zoning of the land in this area. Their application was originally made in xxxx. The goal of the group was to have the local shire council (Council) to change the zoning of the properties from Rural to Residential. You gave the lobby group money to help fund the rezoning application that the group had already made in xxxx. You were not aiming to subdivide the Property as it was your home. Rather, the intent was to increase the value of the land should one day you need or want to sell the Property. You believed that the rezoning would add value to the Property. In xxxx, recognising the need for more housing blocks, the Council enabled landowners to apply for subdivision by changingthe zoning of their properties from Rural Residential to Development. You did not apply for the new zoning. The reason for not applying for the new zoning was in part because you were comfortable as things were and after thinking it through you believed that it was beyond your means to fund a development. In xxxx, you replaced the original dwelling with a new dwelling. Further to this, over the course of the ownership period, further improvements where made. You funded this through money taken from your savings and superannuation. Your original loan for the Property is currently valued at approximately $xxxx and is secured against the Property. You did not borrow any funds for the purposes of the subdivision. In xxxx, you came to realise that you did not have sufficient retirement. You joined with X other adjoining neighbours and applied to the Council for Rezoning/Subdivision of the X properties. In xxxx, conditional subdivision was granted. You were fully aware that it was beyond your financial resources and skill set to undertake the administrative and physical tasks associated with property development of the Property. The intended subdivision of the Property came to the notice of a local property developer (Developer). The Developer approached you convincing you that they had the plan, design skills and the cash resources to bring the project to its completion/marketable stage. The Developer and you entered into a management agreement (Management Agreement) and a sale of land agreement (Sale of Land Agreement) not only to manage the project but also to pay all costs (excluding for the Subdivision Application) related to the subdivision including the building of a new road. The schedule of the Management Agreement defines 'development' as the subdivision of the land into a number of proposed lots (collectively, Lots). Pursuant to the Management Agreement, the Developer will, at its sole cost be responsible for the management, administration and control of the land for the purposes of completing the Development. The Developer's duties include but are not limited to obtaining approvals, instructing consultants, arranging development works and applying for the issue of certificates of title for the subdivision. Under the Management Agreement, you grant the Developer, its officers, employees, contractors and agents the right to access, use and control the land for the purposes of completing the Development and performing the management services for the period of appointment. Throughout the term of the Developer's appointment as manager, you must provide the Developer with all powers and authorities to enable the performance of the management services, and to ratify the actions of the manager performed on your behalf, including but not limited to developing and using the land, maintaining project assets, engaging advisors and negotiating with adjoining landowners. The Developer assumes all risk and liability for the performance of the management services and completion of Development. X of the subdivided lots will be sold to the Developer (as per the terms of the Management Agreement) and the rest will to be retained. You will personally sell the Lots retained through a real estate agent. Under the Management Agreement, the Developer agreed to charge a management fee of $xxxx(inclusive of GST) (Management Fee). Under the Sale of Land Agreement, the Developer agreed to purchase X lots for a purchase price of $xxxx exclusive of GST (Purchase Price). Under the Land of Sale Agreement, the Management Fee would be set off against the Purchase Price and the Developer would only be required to pay to you the balance (if any) of the Purchase Price after that set-off, on the settlement date. All matters related to the property development are funded and undertaken by the Developer in exchange for the X vacant lots. You do not have the skills or the capital to undertake the Development. You did not seek or receive any advice on how to undertake and complete the Development. Upon completion of the Development, You will retain your residential home and X other lots. A real estate agent will sell the X lots of vacant land on your behalf. It is your understanding that a different real estate agent will sell the other X blocks on behalf of the Developer. The earthwork, power, water, internet, and streetlights have been installed. Street trees have been planted which are required as part of the approvals to subdivide. The lots have been fenced both along the front road and down the side of the lots, separating them from each other. You have estimated that the Property had an approximate market value of $xxxx before the Development. You have estimated that the approximate market value of each of the vacant Lots is on average $xxxx. You currently occupy one of the Lots. In terms of previous subdivision and property sale activities, in xxxx, you purchased a property. You lived in this property until xxxx before selling it. During the period of your ownership, you divided the property into X blocks. You sold the vacant land block and retained that block with a house on it. There was no infrastructure or roads built on either of the blocks associated with obtaining approval for the subdivision. You applied for approval to subdivide in xxxx. The vacant lot was sold in xxxx.

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 9-40 | A New Tax System (Goods and Services Tax) Act 1999 , section 23-5 | A New Tax System (Goods and Services Tax) Act 1999 , section 188-10 | A New Tax System (Goods and Services Tax) Act 1999, section 188-25 | A New Tax System (Goods and Services Tax) Act 1999, section 195-1 | Income Tax Assessment Act 1997 , section 6-5

Reasons for decision: Summary: Yes. GST is payable on the sale of the Lots as you are making a taxable supply as per section 9-5 of the GST Act. | Detailed Reasoning - Detailed reasoning: GST is payable on the sale of the Lots if you are making a taxable supply as per section 9-40 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). 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.) All of the requirements of section 9-5 of the GST Act must be satisfied for the sale of the Lots to be a taxable supply. The sale of the Lots satisfies the requirements of paragraphs 9-5(a) and 9-5(c) of the GST Act. That is, you supply the Lots for consideration and the supply is connected with Australia as the Lots are located in Australia. Furthermore, the sale of the Lots in the circumstances described is neither GST-free nor input taxed. Given that you are not registered for GST, it must be determined whether you are required to be registered for GST and whether the supply is made in the course or furtherance of an enterprise that you carry on. | Detailed Reasoning - Whether the sale is made in the course or furtherance of an enterprise that you on: Section 9-20 of the GST Act provides that enterprise includes, among other things, an activity or series of activities done: • in the form of a business (paragraph 9-20(1)(b) of GST Act), or • in the form of an adventure or concern in the nature of trade (paragraph 9-20(1)(b) of GST Act). 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 provides the ATO view on the meaning of enterprise (MT 2006/1).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 (GSTR 2006/6)provides that the discussion in MT 2006/1 equally applies to the term 'enterprise' as used in the GST Act and can be relied on for GST purposes. Paragraph 234 of MT 2006/1 provides that ordinarily, the term business would encompass trade engaged in, on a regular or continuous basis. An isolated one-off transaction may fall into the category of an 'adventure or concern in the nature of trade' where the activities being undertaken do not amount to a business but are commercial in nature and have characteristics of a business deal. Paragraph 178 of MT 2006/1 outlines the main indicators of carrying on a business and they are: • a significant commercial activity • a purpose and intention of the taxpayer to engage in commercial activity • an intention to make a profit from the activity • the activity is or will be profitable • the recurrent or regular nature of the activity • the activity is carried on in a similar manner to that of other businesses in the same or similar trade • activity is systematic, organised and carried on in a businesslike manner and records are kept • the activities are of a reasonable size and scale • a business plan exists • commercial sales of product; and • the entity has relevant skill or knowledge. In addition, it is relevant to consider the length of time the property has been held and to what purpose it had been put to in that time and personal involvement in the development activity. Paragraph 179 of MT 2006/1 states that there is no single test to determine whether a business is being carried on. Whether a business is being carried on is generally the result of a process of weighing all the relevant factors. In the context of considering the above indicators and factors when determining whether the Development and sale of the subdivided lots would be viewed as an adventure or concern in the nature of trade, the following general observations have been made: • You have engaged in significant commercial activities to allow for the subdivision and sale of the Lots and have entered into agreements necessary to facilitate the Development Agreement. The Developer is expected to do more than just the subdivision of the Lots. The Developer is required amongst other things to maintain project assets, engage advisors and consultants, negotiate with neighbouring landowners and enter into any necessary contracts to facilitate the completion of the Development. • Whilst you contend that you have minimal involvement in any aspect of the Development activities, that is not the only determinative factor that should be considered. You have engaged in this venture in a commercial and business-like manner by entering into all the agreements necessary to enable the Developer to carry out the Development activities on your behalf. This clearly demonstrates your purpose and intention to engage in commercial activities. • You actively funded the lobby group to assist with the rezoning application. This shows that you have done more than what is necessary to subdivide and sell the Lots. • There is an intention to profit from the Development to provide additional funds for retirement. The fact that some of the proceeds will be washed through the payment to the Developer does not detract from the view that you have a dual purpose of generating retirement income and a surplus to pay the Developer for their services. • You have carried on the Development in a similar manner to that of other business in the same or similar trade. You have taken systematic steps to obtain the relevant approvals for subdivision of the Property. You have control of what the Developer is undertaking as you retain ownership of the Property until the Development is completed. • There is no clear evidence of a documented plan for the Development, but you have taken a series of coherent and systematic steps to plan and execute the Development by engaging the Developer. • You will be relying on the Developers for knowledge and advice in relation to the Development. Paragraphs 258 to 260 of MT 2006/1 provide that certain type of assets, such as rental properties, business plant and machinery, the family home, family cars and other assets are considered as investment assets. These assets are purchased with the intention of being held for a reasonable period of time, as income-producing assets or for the pleasure or enjoyment of the person. The mere disposal of these investment and private assets does not amount to trade. Assets can change their character from investment to trade, however these assets cannot be held at the same time for both purposes. Paragraphs 262 to 302 of MT 2006/1 consider isolated transactions and sales of real property. Paragraph 263 of MT 2006/1 states that the issue to be decided is whether the activities are an enterprise, in that they are of a revenue nature, as opposed to the mere realisation of a capital asset. Paragraph 265 of MT 2006/1 discusses judicial decisions that have established a number of factors that provide assistance in determining whether activities are a business or an adventure or concern in the nature of trade: • there is a change of purpose for which the land is held • additional land is acquired to be added to the original parcel of land • the parcel of land is brought into account as a business asset • there is a coherent plan for the subdivision of the land • there is a business organisation - for example a manager, office and letterhead • borrowed funds financed the acquisition or subdivision • interest on money borrowed to defray subdivisional costs was claimed as a business expense • there is a level of development of the land beyond that necessary to secure council approval for the subdivision • buildings have been erected on the land. Paragraph 159 of MT 2006/1 explains that whether or not an activity constitutes an enterprise is a question of fact and degree depending on the circumstances of each individual case. In determining whether activities relating to isolated transactions are an enterprise or the mere realisation of a capital asset, it is necessary to examine the facts and circumstances of this case. This requires a consideration of the factors outlined above. However, there may also be other relevant factors that need to be weighed up as part of the process of reaching an overall conclusion. No single factor is determinative. Rather, it will be a combination of factors that will lead to a conclusion as to the character of the activities. In applying the above factors listed in paragraph 265 of MT 2006/1, there was a coherent plan for the subdivision of the land and the Developer was appointed as the manager. By having the Developer manage the subdivision of the Property, the Development has been undertaken in a commercial and business-like manner. There was also a change of purpose for which the land was held. Originally the Lots were held as part of the Property and your primary residence. The character and nature of the Lots has changed from capital in nature to revenue in nature since the subdivision as they have been developed for sale. By incurring considerable expenses to develop the land through the Management Fee paid to the Developer, the sale of the Lots are more than a mere disposal of a capital asset. The intention was clearly to increase return on disposal by developing the land so as to get a better price for it. The steps undertaken were more than what would reasonably be expected for a mere realisation of an asset. While the activities you undertook are a one-off transaction, a balanced view of the factors listed in paragraph 265 of MT 2006/1 reasonably leads to the conclusion that the Development activities amount to an adventure or concern in the nature of trade. The activities you have undertaken go beyond the mere realisation of a capital asset and you are considered to be carrying on an enterprise as defined in section 9-20 of the GST Act. Consequently, you will satisfy the requirements of paragraph 9-5(b) of the GST Act. | Detailed Reasoning - Whether you are required to be registered for GST?: As you are not registered for GST, it needs to be determined whether you are required to be registered for GST. Section 23-5 of the GST Act provides that you are required to be registered if: • you are carrying on an enterprise, and • your GST turnover meets the registration turnover threshold of $75,000. Section 188-10 of the GST Act provides that your GST turnover meets the registration turnover threshold if: • your current GST turnover is at or above $75,000, and the Commissioner is not satisfied that your projected GST turnover is below $75,000 or • your projected GST turnover is at or above $75,000. Your current GST turnover is the sum of the values of all supplies made in a particular month plus the previous 11 months. Your projected GST turnover is the sum of the values of all supplies made in a particular month plus the projected value of all supplies expected to be made in the next 11 months. In working out both your current and projected GST turnover, you disregard certain supplies including: • supplies that are input taxed and • supplies that are not made in connection with an enterprise that you carry on. Neither of these exclusions apply to your case. However, section 188-25 of the GST Act provides that when calculating your projected annual turnover, you do not include any supplies made or likely to be made by you: • by way of transfer of ownership of a capital asset, or • solely as a result of ceasing an enterprise or substantially and permanently reducing the size or scale of your enterprise. The GST Act does not define the term capital assets. Generally, the term 'capital assets' refers to those assets that make up the profit-yielding subject of an enterprise. They are often referred to as structural assets and may be described as the business entity, structure or organisation set up or established for the earning of profits. A revenue asset on the other hand, is an asset whose realisation is inherent in, or incidental to, the carrying on of a business. That is, if the means by which you derive income is through the disposal of an asset, the asset will be of a revenue nature rather than a capital nature even if such a disposal is an occasional or one-off transaction. The supplies in your enterprise are the sales of the Lots which resulted from converting your land, which was originally a capital asset, into a revenue asset. At the time of sale, the Lots are not capital assets. Furthermore, the sale of the Lots is not a transfer solely as a consequence of ceasing to carry on an enterprise. We consider that your enterprise of property development ceases as a consequence of the disposal of the Lots, rather than them being disposed of in consequence of ceasing to carry on your enterprise. Hence, the value of the sale of the Lots is included in your projected turnover. As such, when you sell the Lots, both your current and projected GST turnovers will be above $75,000. Hence, your GST turnover meets the registration turnover threshold and you are required to be registered for GST. Accordingly, paragraph 9-5(d) of the GST Act is satisfied. Therefore, as all the requirements of section 9-5 of the GST Act are satisfied, the sale of the Lots is a taxable supply. | Detailed Reasoning - Question 2: Is any portion of the sale proceeds from the supply of the Lots included in your assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? | Summary: Having regard to your circumstances and the factors outlined in Taxation Ruling TR 92/3 Income Tax: whether profits on isolated transactions are income we determine that the sale of the subdivided blocks have the characteristics of an isolated profit-making transaction and are assessable under section 6-5 of the Income Tax Assessment Act (ITAA 1997). | Detailed Reasoning - Detailed reasoning: In this detailed reasoning pertaining to question 2, unless otherwise stated, all legislative references are to the Income Tax Assessment Act 1997. | Detailed Reasoning - Profits or gains in the ordinary course of business: Taxation Ruling TR 92/3 Income tax: whether profits on isolated transactions are income discusses profits on isolated transactions and the application of the principles outlined in the decision of the Full High Court of Australia in FCT v. Myer Emporium Ltd (1987) 163 CLR 199; 87 ATC 4363; (1987) 18 ATR 693. The following matters bear relevance when considering if isolated transaction amounts to a business operation or commercial transaction: • the nature of the entity undertaking the operation or transaction; • the nature and scale of other activities undertaken by the taxpayer; • the amount of money involved in the operation or transaction and the magnitude of the profit sought or obtained; • the nature, scale and complexity of the operation or transaction; • the manner in which the operation or transaction was entered into or carried out; • the nature of any connection between the relevant taxpayer and any other party to the operation or transaction; • if the transaction involves the acquisition and disposal of property, the nature of that property; and • the timing of the transaction or the various steps in the transaction • If a taxpayer is not carrying on a business makes a profit, that profit is income if: • The intention or purpose of the taxpayer in entering into the profit-making transaction or operation was to make a profit or gain; and • The transaction or operation was entered into, and the profit was made, in carrying out a business operation or commercial transaction. Profits made from a transaction or operation may still be considered income, even if the taxpayer is not involved in a business operation by its ordinary definition. In Myer , the taxpayer was carrying on a large business at the time it entered into the transactions and, in Whitfords Beach, the taxpayer company embarked on a substantial business venture. Through the reasoning in the judgments of these cases, it is suggested that profits made by taxpayers who enter into isolated transactions, with a profit-making purpose, can be assessable income. In Myer , at 163 CLR 213; 87 ATC 4369; 18 ATR 699-700, the Full High Court drew a distinction between the nature of profits from isolated transactions through an intention of profit-making: It is one thing if the decision to sell an asset is taken after its acquisition, there having been no intention or purpose at the time of acquisition of acquiring for the purpose of profit-making by sale. Then, if the asset be not a revenue asset on other grounds, the profit made is capital because it proceeds from a mere realisation. But it is quite another thing if the decision to sell is taken by way of implementation of an intention or purpose, existing at the time of acquisition, of profit-making by sale, at least in the context of carrying on a business or carrying out a business operation or commercial transaction. | Detailed Reasoning - Profits or gains in isolated transactions: Profits from an isolated transaction will be ordinary income where: • the intention or purpose of a taxpayer in entering into the transaction was to make a profit or gain and • the transaction was entered into, and the profit was made, in the course of carrying on a business operation or commercial transaction. TR 92/3 states that whether a profit from an isolated transaction is income according to the ordinary concepts and usages of mankind depends on the circumstances of the case. Profits on the sale of land can therefore be income according to ordinary concepts, within section 6-5, if the taxpayer's development activities have become a separate business operation or commercial transaction, or an isolated profit-making venture. | Detailed Reasoning - Mere realisation: The courts have often said that a profit on the mere realisation of an investment is not income, even if the taxpayer goes about the realisation in an enterprising way. The expression 'mere realisation' is used to contradistinguish a business operation or a commercial transaction carrying out a profit-making scheme ( Myer at 163 CLR 213; 87 ATC 4368-4369; 18 ATR 699-700). If a transaction satisfies the elements set out in paragraph 35 it is generally not a mere realisation of an investment. In Whitfords Beach , Mason J noted the importance and scope of the word 'mere'. It was held that ..it is enough to answer the statutory description that there was a profit-making undertaking or scheme which exhibited the characteristics of a business deal, even though it did not amount to the carrying on of a business ... | Detailed Reasoning - Intention or purpose: TR 92/3 outlines that the relevant intention or purpose of the taxpayer, of making a profit or gain, is not the subjective intention or purpose of the taxpayer. Rather, it is the taxpayer's intention or purpose discerned from an objective consideration of the facts and circumstances of the case. As stated in Myer : ...it may be said that if the circumstances are such as to give rise to the inference that the taxpayer's intention or purpose in entering into the transaction was to make a profit or gain, the profit or gain will be income... For example, as stated at paragraph 42 of TR 92/3, if a taxpayer acquires an asset with the intention of using it for personal enjoyment but later decides to venture or commit the asset either: • as the capital of a business; or • into a profit-making undertaking or scheme with the characteristics of a business operation or commercial transaction, the activity of the taxpayer constitutes the carrying on of a business or a business operation or commercial transaction carrying out a profit-making scheme. Generally, a transaction or operation has the character of a business operation or commercial transaction if the transaction or operation would constitute the carrying on of a business but for it not occurring as part of repetitious or recurring transactions or operations. The following factors are taking into consideration when determining whether an isolated transaction amounts to a business operation or commercial transaction: • the nature of the entity undertaking the operation or transaction ( Ruhamah Property Co. Ltd. v. F C of T (1928) 41 CLR 148 at 154; Hobart Bridge Co. Ltd. v. FC of T (1951) 82 CLR 372 at 383; FC of T v. Radnor Pty Ltd 91 ATC 4689; 22 ATR 344). For example, if the taxpayer is a corporation with substantial assets rather than an individual, that may be an indication that the operation or transaction was commercial in nature. However, if the taxpayer acts in the capacity of trustee of a family trust, the inference that the transaction was commercial or business in nature may not be drawn so readily; • the nature and scale of other activities undertaken by the taxpayer ( Western Gold Mines N.L. v. C. of T. (W.A.) (1938) 59 CLR 729 at 740); • the amount of money involved in the operation or transaction and the magnitude of the profit sought or obtained; • the nature, scale and complexity of the operation or transaction; • the manner in which the operation or transaction was entered into or carried out. This factor would include whether professional agents and advisers were used and whether the operation or transaction took place in a public market; • the nature of any connection between the relevant taxpayer and any other party to the operation or transaction. For example, the relationship between the parties may suggest that the operation or transaction was essentially a family dealing and not business or commercial in nature; • if the transaction involves the acquisition and disposal of property, the nature of that property ( Edwards v. Bairstow; Hobart Bridge 82 CLR at 383). For example, if the property has no use other than as the subject of trade, the conclusion that the property was acquired for the purpose of trade and, therefore, that the transaction was commercial in nature, would be readily drawn; and • the timing of the transaction or the various steps in the transaction ( Ruhamah Property 41 CLR at 154). For example, if the relevant transaction consists of the acquisition and disposal of property, the holding of the property for many years may indicate that the transaction was not business or commercial in nature. In McCarthy v Commissioner of Taxation [2021] AATA 1511 (McCarthy), the applicant and her husband purchased a residential property. Shortly after, they lodged an application for subdivision. This plan was approved and the dwelling on the property was demolished after the tenant had vacated it. At the time of purchase of the property, there was a long-term tenant in residence. The two lots resulting from the subdivision were sold and the applicant applied for a private ruling to determine whether the profits derived were assessable income under section 6-5. The Commissioner found that the profits were assessable income under section 6-5, and the applicant objected to the private ruling decision. In McCarthy , the applicant argued that the transaction could not be considered a business operation or commercial transaction, as it did not satisfy any of the commercial transaction indicators set out in paragraph 49 of TR 92/3. As stated at paragraph 48 of McCarthy: The Tribunal makes two observations about the above argument. The first is that ' ... the applicable test is ... that the transaction must be the sort of thing a businessperson or person in trade does' (Steward J's proposition from Greig v Commissioner of Taxation at [242](2020) 275 FCR 445.The test is not whether the transaction was carried out in an efficient or business-like manner, the test is whether the transaction is of the sort that a person in business would undertake. In Federal Commissioner of Taxation v Cooling (1990) FCA 297 (Cooling) it was held that it is not necessary that the intention or purpose of profit-making by sale be the sole or dominant purpose of the taxpayer entering into the profit-making scheme, but that it remains not an insignificant aspect of the purpose. With regards to McCarthy and Cooling , it follows that the purpose of the profit-making scheme need not be evident at the time of acquisition of the asset, merely that a profit-making opportunity was present at the commencement of the transaction. | Detailed Reasoning - Application to your circumstances: You are not conducting the activity as a business of property development. It is therefore necessary to examine whether the sale of the subdivided lots are considered isolated profit-making transactions. As stated above, the intention or purpose behind the sale of the Property must be looked at objectively and is not limited to the intention at the time of purchase. At the time of purchase of the Property in xxxx, your intention was to make the Property your family home. It was later in the year of purchase that you were approached by the lobby group who invited you to contribute money towards the rezoning application. Between xxxx and xxxx you made the decision to contribute money towards the rezoning application. Although this is not determinative of a change of your intention, it indicates an involvement in the rezoning application which was made aware to you to be for development purposes. The application for rezoning was approved in xxxx and encompassed your property however you did not apply for your property specifically to be rezoned. After the renovation of your dwelling, which occurred between xxxx and xxxx, you were concerned about your financial stability. You embarked on a strategy to maximise the price you could obtain by selling the remaining land and applied to rezone your property to 'development' in association with some of your neighbours. The decision to act with your neighbours to rezone all of your properties goes beyond the mere realisation of your land as a capital asset. A subdivision undertaken in this way indicates that it was your intention to change the form of your property so you would make a higher profit than might be otherwise obtained. The manner in which you are undertaking the subdivision and sale of the subdivided lots has a significant commercial flavour. In the terms discussed in TR 92/3, it amounts to a business operation or commercial transaction. As such, any profit you make from this process will be assessable under section 6-5 of the ITAA 1997 as ordinary income.