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Edited version of private advice
Authorisation Number: 1052172349107
Date of advice: 25 September 2023
Ruling
Subject: GST - subdivided land
Question
Will the sale of the subdivided portion of the property, that originally formed part of a block on which your primary residential premises is situated, be subject to goods and services tax (GST) when sold?
Answer
No, the sale of the subdivided portion of the property will not be subject to GST when sold.
This ruling applies for the following periods:
Financial years ending 30 June 2023 to 30 June 2025.
The scheme commences on:
The date the ruling is issued
Relevant facts and circumstances
You purchased the property, with settlement occurring on DD MM YYYY.
The property is your main residence in which you reside, and you have lived in this property since purchase.
The property is approximately XXXm2 in size.
You have decided to sell a portion of your existing property. The portion of the property being sold is approximately XXX m2.
There is no street access to this portion of the property and the property has no utilities connected to the lot.
You are not registered for GST.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 9-5
Reasons for decision
Under section 9-5, an entity makes a taxable supply where the supply:
1. is made for consideration; and
2. is made in the furtherance of an enterprise being carried on; and
3. is connected with the indirect tax zone; and
4. is made by a supplier who is 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, the supply of the subdivided portion of the property, would be made for consideration and is connected with the indirect tax zone. However, the supply of the property is not in the course of an enterprise being carried on by you and you are not registered or required to be registered for GST.
Therefore, as all of the requirements of section 9-5 are not met the supply of the subdivided portion of the property will not be subject to GST when sold.