Private ruling: GST and sale of vacant land
Date of advice: 7 June 2022
Published: August 2022

Ruling: Q1: Are you, <entity name>, liable for GST pursuant to section 9-40 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when you sell vacant land located at <address> (the Property)? | A1: No. The sale of the Property will not be a taxable supply because the sale was not made in the course of an enterprise and you are neither registered nor required to be registered for GST. Therefore, GST will be not payable on the sale of the Property.

Relevant facts and circumstances: You, <entity name>, are not registered for GST and have never been registered for GST in the past. You hold an active ABN (XX XXX XXX XXX) because it is prudent to have an ABN in case it is required for any work you undertake in your profession. You ceased working as an <occupation> in late <date> when you commenced your retirement. You did not contract with or provide services to persons in the <industry name> while working as an <occupation>. On <date> you came out of full retirement to be employed by a company in a casual role as an <occupation>. You are the owner of a property located in Australia at <address> (the Property). The Property comprised an area of XXXX square metres of vacant land at the time of your purchase. You purchased the Property in <year> with the intention of building a dwelling to be used as your primary place of residence in your retirement. The Property was not purchased to be added to an original parcel of land already owned. In <year>, you built a machinery shed on the Property to house equipment for property maintenance. The shed does not have electricity or any other utilities and is non-habitable. There are no other buildings or structures on the Property. During the course of your ownership you leased the shed to your family to store private items. The leasing occurred infrequently and for short periods of time. In <year>, your Property and the properties in your area were re-zoned as residential. You did not instigate the rezoning however you were part of a group of landowners that contributed to the rezoning process. Following the rezoning, development has occurred on various properties of the original landowners involved in the rezoning. As a result you no longer have the intention to build your primary place of residence and have decided to sell the Property. You are selling the Property as is (one title) without subdivision. There will be no works carried out on the Property prior to settlement and you have not lodged a Development Application with the council. In <year>, you purchased a unit with your spouse. The unit is not your primary place of residence but acquired as an investment for rental income.

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 195-1