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When a subdivision project is carried on regularly and continuously and involves the making of supplies to another person for consider, or intends to do so, it is a table activity.

When is an activity being carried out continuously or regularly?

An activity is considered to be continuous or regular if it is carried on over a period uninterrupted in time. Whether the subdivision project is being carried out regularly/continuously will need to be considered case by case, taking into account all the relevant facts of each case. Relevant factors may include:

  • Scale of the subdivision

The larger and greater the scale of the subdivision the more likely it is to be an activity carried on continuously/regularly.

  • Level of development work

When there is a greater level of development work, it is likely that the scale of the project is greater and therefore its likely to be continuous and regular. Development work includes:

  • Roading and installation of driveways and paths
  • Earthworks and landscaping
  • Installation of infrastructure such as sewage, power, drainage etc
  • Erection of retaining walls or fences
  • Demolition or removal of existing infrastructure
  • Construction of buildings or structures on the land
  • Number of lots created and sold

While there isn’t a specific number of lots created that determine whether a taxable activity exists, when this is happening with multiple lots, it is likely to be a taxable activity. However, this is not always the case.

  • Time and effort involved

When the project is carried out over a long period of time, this may suggest it as being continuous. Along with this if there is significant effort exerted into the project such as paperwork, financing, engaging with lawyers and real estate agents etc

  • Level of financial investment

The level of financial investment is unlikely to be a significant factor alone however it provides support to the other factors such as scale of the subdivision and level of developmental work in deciding if it is continuous or regular.

  • Level of repetition

An activity is likely to be carried on regularly if it is being done on a regular or repetitive basis e.g., an individual has a pattern of acquiring land to subdivide will constitute as a taxable activity

  • Existing Taxable activity

If the taxpayer is already registered for GST, whether the subdivision is part of that taxable activity will depend on whether the subdivision was carried on in the course or furtherance of that taxable activity and whether they are connected.

In general, small-scale subdivisions which create one lot or involve sale of bare land will not constitute as a taxable activity. Likewise, the construction and sale of single house from the small-scale subdivision will generally not be a taxable activity.

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