Private ruling: GST and the sale of property
Published: June 2014

Ruling: Q1: Is the supply of the property by you subject to goods and services tax (GST)? | A1: No. Under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), 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 Australia; 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 Based on the information provided, your sale of the vacant land does not satisfy all the requirements of a taxable supply under section 9-5 of the GST Act because: (i) your activity of selling land does not constitute the carrying on an enterprise; and (ii) You are neither registered nor required to be registered for GST.




Relevant facts: A (you) is not registered for GST. You purchased a property (property) in 20XX, for $XXX,000. The property is a vacant land. No GST was included in the price on your purchase. | A copy of the contract for sale in relation to your acquisition of the property was provided. | There is no building constructed on the land since your acquisition of the property. You have not rented out the property since it was acquired in 20XX. The property has never been used to conduct a business and remained vacant land. You will not undertake any development of the property prior to sale. | You have had a development application (DA) approved for the construction of X commercial premises and xx residential premises with the view to building the properties and renting them out. | After the approval of the DA, you realised that the estimated cost of construction is higher than the original budget. Therefore, you intend to sell the property with the DA approved. | You advise that you did not claim any GST on your acquisition of the property or for any expenses in relation to the property. | You are not carrying out an enterprise of buying and selling the property. This is one of the transactions.