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Edited version of private advice
Authorisation Number: 1051955101111
Date of advice: 1 March 2022
Ruling
Subject: GST and supply of vacant land
Question
Is the supply by the Superannuation Fund (you) of (the Property) a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Answer
Yes
This ruling applies for the following period:
XX Month 20XX till quarter ending XX Month 20XX
The scheme commences on:
XX Month 2022
Relevant facts and circumstances
You, the XX Superannuation Fund are registered for GST.
You acquired a property (the Property) in 20XX which at the time consisted of residential premises together with a number of residential units at the rear of the property.
The Property was purchased with the intention that this property would provide rental income for the Superannuation Fund, however it was discovered that the rear buildings were non-conforming, were deemed to be unsafe and required a high cost of maintenance.
As it was considered that it would be a drain on your resources/funds to retain the premises on the Property, you decided to demolish all the premises. Since the demolition, the Property has remained vacant however in 20XX you submitted a Development Application that did not proceed.
You (as Vendor) have entered into a Contract of Sale to sell the Property to a purchaser for consideration.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 9-5
Reasons for decision
Section 9-5 of the GST Act provides that you make a taxable supply if:
- you make the supply for consideration;
- the supply is made in the course or furtherance of an enterprise that you carry on,
- the supply is connected with the indirect tax zone (Australia); and
- you are registered or required to be registered for GST.
However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.
In this case you acquired the Property as part of conducting your leasing enterprise. Further you make the supply for consideration, the supply is connected with Australia and you are registered for GST. As the supply of vacant land is not input taxed or GST-free you therefore make a taxable supply.