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Edited version of your written advice
Authorisation Number: 1012730145598
Ruling
Subject: Goods and Services Tax and the sale of land by an enterprise
Question
Is the sale of the vacant land subject to Goods and Services Tax?
Answer
No. Based on the facts provided, your supply of the land is not a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). The sale was not made in the course or furtherance of an enterprise as defined by section 9-20 of the GST Act. This is because the sale of the land was an isolated transaction and merely the realisation of a private capital asset.
Your remaining questions regarding GST registration and using the margin scheme are therefore not relevant.
Relevant facts and circumstances
• You are not registered for Goods and Services Tax (GST).
• You and your spouse are employed.
• You jointly purchased the residential property. (Residential premises) with your spouse.
• The property included residential premises on one title and 1500 square meter block, separately titled (block).
• The block contains many trees, plants and a large amount of grassy areas and an in ground pool, the block did not suit your needs
• The previous owner would only sell the residential premises and the block together
• You purchased both blocks with the intention of living in one and selling the other.
• You arranged for a friend to purchase the block with the intention of being your future neighbor.
• You established the block price based on a broad market value
• Within a month of the purchase of land, you entered into a contract to sell the block to a purchaser.
Relevant legislative provisions
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