| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1012671478687
Ruling
Subject: GST and the sale of property.
Question:
Is the supply of the subdivided land by you subject to goods and services tax (GST)?
Answer:
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 subdivided 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 the subdivided land does not constitute the carrying on an enterprise; and
(ii) you are neither registered nor required to be registered for GST.
Relevant facts:
You are not registered for GST.
You and your spouse bought a property in 19XX. This property is a block of land with a residential residence on it. You have occupied the residence on the property as a family home since that time.
No GST was included in the price on your purchase.
In XXXX, you jointly with your neighbour made an application for development consent to subdivide the property with the neighbour's property. Your property was subdivided without any part of the neighbour's property into X lots.
You became sole registered proprietor of the property after the death of your spouse.
In XXXX a strip of the original land was transferred to the neighbouring owner. This formed part of the arrangements in the original development application involving the subdivision of X properties in Y.
You will retain the portion of the property which contains your residence that will continue to be your principal residence.
You have not previously been involved in the subdivision of land or the buying and selling of land for profit.
There have been no commercial activities carried on the property since your acquisition of the property.
You advise that you did not claim any GST on your acquisition of the property or for any expenses in relation to the property.
There is no business organisation associated with the subdivision of the land, and there is no manager employed or business premises used to conduct these activities.
You do not have a business plan for the subdivision. There is no organisation set-up for the subdivision and sales of the subdivided lot of land.
Works were carried out on the property to the necessary levels to achieve council approval for the subdivision only.
You used your personal funds to finance the subdivision.