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Edited version of private advice
Authorisation Number: 1051578938703
Date of advice: 10 October 2019
Ruling
Subject: Sale of property
Question
Is GST payable on the sale of property?
Answer
No. GST is not payable on the sale of property.
GST is payable on taxable supply. A taxable supply is one that meets the following requirements:
· the supply is made by an entity for consideration,
· the supply is made in the furtherance or course of carrying on the entity's enterprise,
· the entity that is making the supply is registered or required to be registered for GST,
· the supply is connected with the indirect tax zone,
· the supply is neither a GST-free nor an input taxed supply.
The subdivision of the property in this case does not amount to an enterprise as you are merely subdividing your principle place of residence and selling the newly created block as vacant land. Accordingly the sale does not meet one of the requirements of a taxable supply and as such it is not subject to GST.
Relevant facts and circumstances
· You purchased your principle place of residence in a particular year.
· You have not conducted an enterprise from this property.
· You lodged an application to subdivide the property into 2 lots at your local council.
· You will not be developing the newly created lot in any way.
· You will be selling the newly created lot to a third party as a vacant block of land without any buildings.
Relevant legislative provisions
Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999