Selling or leasing farmland
When you sell farmland, your sale is GST-free if both:
- the land was used for a farming business for at least five years immediately before the sale
- the buyer intends to use it for a farming business.
A lease by an Australian government agency of, or a long-term lease of, farmland is also GST-free if the above conditions are met.
A long-term lease is either:
- a lease for at least 50 years
- a renewed or extended lease expected to continue for at least 50 years after the option to renew is exercised or the extension is granted.
A sale of land sub-divided from land on which a farming business has been carried on for at least five years will be GST-free if both:
- it is permissible to use the land for residential purposes
- the sale is made to an associate of the supplier without consideration or for consideration that is less than the market value of that piece of land.
The lease by an Australian government agency of, or long-term lease of, land under the above conditions will also be GST-free.
The sale of farmland together with certain assets may, in some cases, also be a GST-free sale of a going concern.
If you sell farmland and you do not meet the above conditions, the sale is taxable and you are liable for GST on the sale price.