SMALL-SCALE PROPERTY DEVELOPMENT: GST IMPLICATIONS

The purpose of this article is to explore the GST implications of small-scale property development in Australia and to provide guidance as to whether such activities give rise to a GST liability. The legislation governing the operation of the GST affecting these projects uses the familiar terminology of 'business', but it also uses terminology such as 'adventure or concern in the nature of trade', which has not received extensive consideration by the Australian courts. The authors review relevant case law to identify key principles, which will guide the courts in applying this terminology to small-scale property development, and provide guidance as to when a taxpayer undertaking such projects will be required to register for GST. The authors also discuss the factors relevant to determining the impact of the timing of registration. The article concludes that small-scale property developers need to be aware of the complexities and uncertainty in relation to the application of the GST to such projects.