Vacant Land
Is the sale of vacant land (residential or commercial) subject to GST?
Whether the sale of vacant land is subject to GST depends entirely on whether the supply satisfies the conditions set out in s.9-5 of the GST Act as the essential elements of a taxable supply.
A client is selling vacant land zoned residential; will the supply be treated as a supply of existing residential premises and input taxed?
No. Vacant land is not considered to possess the characteristics essential to residential premises.
A subdivider of residential land sells a number of lots to a builder who intends to construct houses on the lots and on sell to domestic consumers. Can the margin scheme be applied in these circumstances?
Yes. Where land is sold to a builder who intends to resell to private individuals for residential purposes, the builder will need to buy on the margin scheme if intending to sell on the margin scheme. The ultimate purchaser will then only pay GST on the excess of the total sale consideration over the cost of land to the builder.
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