{"id":11013,"date":"2025-04-07T22:15:56","date_gmt":"2025-04-07T12:15:56","guid":{"rendered":"https:\/\/mnygroup.com.au\/?p=11013"},"modified":"2025-04-13T14:29:08","modified_gmt":"2025-04-13T04:29:08","slug":"are-property-sales-subject-to-gst-lessons-from-lance-v-commissioner-of-taxation","status":"publish","type":"post","link":"https:\/\/mnygroup.com.au\/en\/are-property-sales-subject-to-gst-lessons-from-lance-v-commissioner-of-taxation\/","title":{"rendered":"Are Property Sales Subject to GST? Lessons from Lance v Commissioner of Taxation"},"content":{"rendered":"\n

Yes, in rare occasions, some property sales are subject to GST (Goods and Services Tax) after a recent decision by the Administrative Appeals Tribunal (AAT), Lance v Commissioner of Taxation [2024] AATA 11, highlights an important GST consideration for property owners involved in land development activities.<\/p>\n\n\n\n

Key Decision from the Case:<\/strong><\/h2>\n\n\n\n

In Lance’s case, the AAT ruled that selling property (“Sutton Farm”) after significant development activities\u2014such as rezoning, subdivision approvals, infrastructure installations (sewerage, water, electricity)\u2014was done “in the course or furtherance of an enterprise.” Consequently, the sale was considered a taxable supply under GST legislation.<\/p>\n\n\n\n

What Does This Mean for Property Owners?<\/strong><\/h2>\n\n\n\n

The AAT decision underscores that even if you initially purchase a property for private use or family purposes, undertaking major development or subdivision activities can transform your actions into an enterprise from a GST perspective. This classification means you must consider GST implications when selling the property.<\/p>\n\n\n\n

3 Factors considered by the AAT when deciding if GST should apply to the sale of a property:<\/strong><\/h2>\n\n\n\n

1. Scale and nature of the development activities<\/strong><\/h3>\n\n\n\n

Extensive capital improvements and subdivisions suggested commercial intent.<\/p>\n\n\n\n

2. Financial motivations<\/strong><\/h3>\n\n\n\n

Borrowing large sums and subsequently selling the property to repay those loans indicated commerciality.<\/p>\n\n\n\n

3. Documented intentions<\/strong><\/h3>\n\n\n\n

Public communications suggesting a commercial use of the property supported the conclusion of an enterprise.<\/p>\n\n\n\n

How to calculate GST when selling property<\/strong><\/h2>\n\n\n\n

When selling property, GST is calculated based on whether the sale is subject to GST, and if so, using the following guidelines:<\/p>\n\n\n\n

1. Determine if GST applies:<\/strong><\/h3>\n\n\n\n