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Edited version of private advice
Authorisation Number: 1052242628897
Date of advice: 19 April 2024
Ruling
Subject: GST - sale of property
Question 1
Would the sale of a specified property located in Australia (the Property) be a taxable supply?
Answer
No.
Section 9-40 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that you are liable to pay GST on any taxable supply that you make.
Section 9-5 of the GST Act provides that you make a taxable supply if the supply meets all the following requirements:
(a) you make the supply for consideration
(b) the supply is made in the course or furtherance of an enterprise that you carry on
(c) the supply is connected with Australia, and
(d) 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 your case, the sale of the Property does not meet all the requirements of section 9-5 of the GST Act. This is because you are not registered for GST and based on the information provided, you are not required to be registered for GST as the sale of the property is not in the course or furtherance of an enterprise that you carry on. Therefore, the sale of the Property would not be a taxable supply and hence you would not be liable to pay GST on the sale.
Question 2
If the sale of the Property is deemed to be a taxable supply, would the margin scheme apply?
Answer
As the sale of the Property is not a taxable supply, the margin scheme is not relevant for consideration.
This private ruling applies for the following period:
dd/mm/yyyy to dd/mm/yyyy
Relevant facts and circumstances
You are not registered for GST.
You purchased the Property on dd/mm/yyyy.
The area of the Property is X hectares and has been vacant land since the date of acquisition.
At the time of acquisition, the Property was zoned rural. On or about mm/yyyy, the zoning of the Property changed to enterprise which means now you would be liable for land tax on the Property.
You have not subdivided the Property and there is no DA approval on the land.
You have never used the Property for business or any income producing purposes.
You will not carry on any enterprise on the Property prior to its sale.
You do not carry on any other enterprise.
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
A New Tax System (Goods and Services Tax) Act 1999 section 9-40
A New Tax System (Goods and Services Tax) Act 1999 section 75-5