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Re: Gst and vacant land

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Hi all, I have a question regarding GST and Land 

 

I bought a vacant block of land over a year ago to build a house on. I have had the land over a year. I was selling my current house to build a house on it. However my current house didnt sell so I have decided to sell the land. Do I have to pay GST on this land?

 

thanks

Rebecca

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ATO Certified

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Hi @beck1mead

 

Welcome to our Community!

 

Generally speaking, you may be required to pay GST on the sale of property if:

  • the turnover from your property transactions and other transactions are more than the GST registration threshold, or
  • your activities are regarded as an 'enterprise' for example, if you buy land with the intention of developing it for immediate resale at a profit.

If you decide to sell the block of land, you may be subject to capital gains tax (CGT) as @macfanboy advised. You can find more information about selling land in our Property guide, alternatively if you'd like a more tailored response relating to your situation you can contact our Early engagement team by submitting a request form or requesting a call back and an officer will contact you to discuss further. 

 

Thanks, JodieH. 

 

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Devotee

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As your intentions were not to make a profit in a business-like manner (buying/selling land, houses etc) then I believe that you do not have to pay any GST on the sale.

 

You will have a Capital Gains liability, which may be a gain or loss.

 

Best to speak to an experienced Tax Agent/Consultant to ensure that you minimise the Capital Gains tax.

 

There are many things that you can add to the purchase price which will reduce the overall profit, therefore, will enable a lower gain.

 

This gain will be added to your income for the year and taxed accordingly.

 

 

 

 

Best answer

ATO Certified

Community Support

Replies 0

Hi @beck1mead

 

Welcome to our Community!

 

Generally speaking, you may be required to pay GST on the sale of property if:

  • the turnover from your property transactions and other transactions are more than the GST registration threshold, or
  • your activities are regarded as an 'enterprise' for example, if you buy land with the intention of developing it for immediate resale at a profit.

If you decide to sell the block of land, you may be subject to capital gains tax (CGT) as @macfanboy advised. You can find more information about selling land in our Property guide, alternatively if you'd like a more tailored response relating to your situation you can contact our Early engagement team by submitting a request form or requesting a call back and an officer will contact you to discuss further. 

 

Thanks, JodieH. 

 

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