New Zealand: Clarifying GST Treatment for Subdivision Projects

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The New Zealand Inland Revenue issued Fact Sheet No. QB 24/04 FS 1, which clarifies the GST treatment of subdivision projects. The fact sheet highlights the following points:


  1. A subdivision project must involve the regular or continuous sale of multiple lots to be considered a taxable activity.
  2. Projects with a higher number of sales are more likely to be deemed continuous or regular.
  3. Factors such as the scale of the subdivision, development intensity, time, effort, financial investment, and repetition are relevant in determining the continuity or regularity of an activity. In contrast, factors such as commerciality, activities prior to the intent to sell, or activities related to unsold land are not relevant.
  4. GST-registered entities must consider specific information regarding taxable activities.
  5. Income tax may apply to all land sales, regardless of whether a taxable activity is being carried out.



Source: govt.nz

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