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Edited version of your written advice
Authorisation Number: 1051504004061
Date of advice: 09 April 2019
Ruling
Subject: GST and sale of farm land
Question
Is the sale of the farm land GST-free?
Answer
Yes.
The scheme commences on:
Xx yy zzzz
Relevant facts and circumstances
You are selling farm land.
Your employees were made redundant. In order to maintain and manage the farm and prepare the Land for sale some individuals were employed by the Receivers on a fulltime basis. These fulltime employees were supported by casual employees, contractors and the Receivers staff. The Receivers sought to operate the farm and remediate the land in preparation for the Land to be sold.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 subsections 40-65(1) & 38-475(2)
A New Tax System (Goods and Services Tax) Act 1999 section 38-480
Reasons for decision
Section 38-480 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that the supplies of farmland will be GST-free if two requirements are met. The requirements are:
(a) the land is land on which a farming business has been carried on for at least five (5) years preceding the supply; and
(b) the recipient of the supply intends that a farming business be carried on, on the land.
In this case we have been advised that the purchasers will agree and acknowledge that they intend to carry on a farming business on the Land.
The facts provided also indicate that a farming business has been conducted continuously for 5 years preceding the supply.
Therefore, we are of the view that the sale of the land is GST-free under section 38-480 of the GST Act.