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Edited version of private advice
Authorisation Number: 1051595798290
Date of advice: 23 October 2019
Ruling
Subject: Sale of vacant lot purchased to build your home - not a taxable supply
Question
Will sale of the vacant lot be subject to GST?
Answer
No. Having applied all the principles in Miscellaneous Taxation Ruling MT 2006/1 to the present circumstances, we conclude that the sale of the property will not amount to an enterprise and the sale of the lot will not be a taxable supply pursuant to section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). The sale of the lot will be regarded as a mere realisation of a capital asset.
This ruling applies for the following period:
Year ending 30 June 2020
Relevant facts and circumstances
You and your spouse purchased a vacant block with the intention to your home and to live there indefinitely.
The purchase of the land required a large amount of savings and you were stretched financially. You were looking for additional funding to build the house or look for cheaper alternate way to build.
You were approached by a person known to you, to purchase the block of land and decided it was best financially to sell the land.
The contract of sale was dated this year with settlement to incur within 60 days; this has been delayed due to the purchaser. You have provided the expected settlement value.
You and your spouse have no connection to property development and did not advertise the lot for sale.
The offer to sell the property was a more feasible option for the family financially. If the offer did not present itself you would have still looked at building your home on the 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 9-20