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  • Vacant land and subdividing

    The tax treatment of land and the proceeds from selling it generally depends on whether it's considered a capital asset or the subject of a business or commercial transaction (such as where it's considered the trading stock of a business dealing in land).

    Vacant land is usually considered a capital asset subject to capital gains tax (CGT).

    However, when land transactions are undertaken as part of a business activity, sale proceeds may be considered ordinary income and subject to GST.

    Certain purchasers of potential residential land are now required to withhold an amount from the price of that land for payment to us. The withholding amount in most instances will be due on the settlement date or the day you paid the first instalment under an instalment contract. The GST at settlement changes started on 1 July 2018.

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    Last modified: 11 Dec 2018QC 45084