Disclaimer This edited version has been archived due to the length of time since original publication.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: 1012971505401
Date of advice: 24 February 2016
Ruling
Subject: GST and sale of real property
Question
Is the sale of one allotment of vacant land subdivided from a main residence subject to GST?
Answer
No.
You will not be making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). This is because based on the information provided, the sale of the subdivided land, will be the mere realisation of a private asset. Hence, the sale will not be made in the course or furtherance of an enterprise that you carry on.
Relevant facts
You own the property located in Australia.
You purchased the property a few years ago and only used the property as your main residence.
The property is a large allotment and you intend to subdivide the land to segregate the area that you do not use. You will retain the lot that contains your house and you will continue to use it as your main residence. You intend to sell the proposed new vacant lot.
You will only do the minimum required by Council to obtain the separate titles. At this stage, the costs would include surveying, fencing and maybe electricity and water installation. You do not intend to do any other works. You will fund the subdivision costs from your own savings.
You are not currently carrying on any enterprise and you are not registered for GST.
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 paragraph 9-5(a).
A New Tax System (Goods and Services Tax) Act 1999 paragraph 9-5(b).
A New Tax System (Goods and Services Tax) Act 1999 paragraph 9-5(c).
A New Tax System (Goods and Services Tax) Act 1999 paragraph 9-5(d).
A New Tax System (Goods and Services Tax) Act 1999 section 9-20.