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Edited version of your written advice
Authorisation Number: 1012963102252
Date of advice: 8 February 2016
Ruling
Subject: GST and the sale of property
Question
Is the supply of the property 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;
(b) the supply is made in the course or furtherance of an enterprise that you carry on;
(c) the supply is connected with the indirect tax zone (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 vacant 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 land does not constitute the carrying on an enterprise; and
(ii) You are neither registered nor required to be registered for GST.
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
A (you) owns a property in Australia. You are not registered for goods and services tax (GST).
You and your late spouse acquired the property in 19XX. Their share in the property was transferred to you when they passed away in 20XX.
The property is an area of XX hectares square metres of land with a house on it. The property is used for farming and residential purposes.
You have occupied the house on the property as your family home since 19XX.The vacant land is used for livestock grazing since your acquisition of the property.
You have recently subdivided the property. Your intention is to sell one or both X hectors lots to fund your ongoing living expenses, healthcare needs and ongoing maintenance of the remaining property.
There have been no substantial renovations/alterations done to the property other than replacement of farm fencing, water tanks and other farm infrastructure.
The level of activities undertaken for the subdivision is minimal development work to meet the council requirements.
There are no buildings on the new subdivided lots of land that are for sale.
You advise that the disposal of subdivided lots of land had not been conducted in the manner of an enterprise but rather in the manner necessary for you to fund your daily needs.
You do not have a documented business plan, and there is no organisation set-up for the subdivision and sales of the lots of land.
You have not accounted for the property as a business asset or expense. You have not claimed any deductions for the purchase of the property or any subdivision costs for income tax purposes.
The property has not been used to conduct a business. The vacant land was always used by you for private purpose. You have not carried out any business on the vacant land.
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 9-25
A New Tax System (Goods and Services Tax) Act 1999, Section 23-5
A New Tax System (Goods and Services Tax) Act 1999, Section 40-40