Private ruling: GST and sale of vacant land
Date of advice: 24 June 2016
Published: August 2016

Ruling: Q1: Is your sale of the vacant land to a third party a taxable supply? | A1: No, your sale of the vacant land is not a taxable supply. Your supply of the vacant land to a third party is not made in the course of carrying on an enterprise for GST purposes. Hence the sale of the vacant land is not a taxable supply. You are not required to remit 1/11 th of the sale price to the Australian Taxation Office (ATO).

Relevant facts and circumstances: In XXXX, you and your spouse bought the vacant land using money from an inheritance. You intended to build a home on the vacant land for your principal residence. However, the plan to build a house on the vacant land was never carried out due to family problem. The land remained vacant and no activity was carried out on the vacant land. You are registered for GST purposes in an enterprise of renting commercial premises on another property, unrelated to the vacant land. The vacant land has not been brought into account as a business asset, nor have expenses related to the land has been claimed as business expenses. No business activity has been operated on the vacant land and it has not been utilised to generate income for you. You are going to sell the vacant land as it is superfluous to your needs.

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