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Tax issues for property developers, one-off builders and developers paper

Published on 06 Oct 06 by VICTORIAN DIVISION, THE TAX INSTITUTE

In 1968 Professor Stone listed as one of a number of “apparently meaningless categories” what he called “the distinction over an unusually penumbral area between capital and income”. That uncertainty continues and now affects property investors and developers both in an income tax/CGT context, and also in a GST context. This paper examines the current issues affecting property investors and developers, with a view to providing some certainty and clarity in an increasingly difficult area. Issues covered include:

  • distinguishing income from capital for small scale developments - a new take on an age-old theme
  • how long does it take before a profit or gain is taxed on capital account?
  • what is the number or scale of developments required before a gain is taxed as ordinary income?
  • the practical implications of land becoming trading stock
  • interaction issues between the income tax/CGT position and GST.

Author profile

Lachlan Wolfers CTA
Lachlan Wolfers, CTA, is the Global Head of Indirect Taxes for KPMG, and also the Global Head of Data for KPMG Tax & Legal. He is also the National Leader of KPMG Law in Canada. He has over 25 years of experience advising multinational companies on indirect taxes, as well as tax transformation and technology. Lachlan is passionate about the role of indirect taxes in driving developments in the digitalization of the tax function. His recent publications, 'Transforming the in-house tax function through Technology', ‘The Future of Indirect Taxes to 2030‘, ‘The Future of VAT in a Digital World’ and ‘The Future of Generative AI in the Tax Profession’ all seek to provide insights on developments in areas like indirect taxes, how data is managed in the tax function and in the use of technologies to chart a course to the future. Lachlan has a strong sector focus on the digital economy and in the financial services sectors, and acts for many of the largest companies in these sectors, including for industry bodies. Lachlan also has considerable experience in the implementation of VAT/GST systems, having done so in Australia in the year 2000, and in China from 2012 to 2016. In 2020 Lachlan was awarded the Indirect Tax Advisor of the year for the Asia Pacific region by the International Tax Review. Lachlan has a long history of providing support and expertise to policymakers, finance ministries and tax authorities around the world, including in China, Australia and the UK, as well as the OECD. He is admitted as a Solicitor to the Supreme Court of NSW, and is called to the Bar by the Law Society of Ontario. Earlier in his career, Lachlan was the Associate to Justice Keith Mason, President of the NSW Court of Appeal. Lachlan has co-authored the leading textbook on capital gains tax in Australia (with Adjunct Professor Gordon Cooper AM), as well as authoring chapters for textbooks on income tax and GST. He was previously a National Director of the Taxation Institute of Australia. - Current at 19 September 2025
Click here to expand/collapse more articles by Lachlan R WOLFERS.

 

This was presented at 45th Victorian State Convention: Finding buried treasure .

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