A recent ATO post on its social media channels may signal the Commissioner of Taxation’s focus on the GST obligations of taxpayers involved in the development of property for sale at a profit and whether they are required to register for GST. 

This is coupled with recently updated guidance from the ATO reminding taxpayers, even if they are not in a business, if their turnover from property transactions is more than the GST registration threshold of $75,000, and their activities are regarded as an ‘enterprise’ they may be required to register for GST. 

There may be a scenario, envisaged by the ATO that, even if a taxpayer is not in business, if the turnover from property transactions and other transactions is more than the GST registration threshold, and the other activities are regarded as an 'enterprise', the taxpayer may be required to register for GST

One comment made in relation to the recently released ATO Draft Property and Construction Website Guidance in relation to the ATO’s position on property development and whether relevant property is held on either capital or revenue account (Guidance) (we discussed this Guidance in our earlier article) is the Guidance’s failure, except in passing, to deal with GST issues relating to these types of transactions.

It is our view this is an area, property development and GST, in which the ATO will only have an ever increasing interest, particularly in light of other steps taken to obligate purchasers of certain taxable supplies of new residential premises or potential residential land to withhold GST at settlement  (we have commented on these changes here).

If you have any questions about the above or the tax, including GST, treatment of property development and sale in general, please contact:

Sam Campbell
Associate | Business Law
Sladen Legal
M +61 423 515 454 | T +61 3 9611 0135
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
E: scampbell@sladen.com.au

Neil Brydges
Special Counsel | Accredited specialist in Tax Law
Sladen Legal
M +61 407 821 157 | T +61 3 9611 0176
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia  
E: nbrydges@sladen.com.au

Kelvin Yuen
Lawyer
Sladen Legal
T +61 3 9611 0177
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
E: kyuen@sladen.com.au