A New Tax System (Goods and Services Tax) Act 1999

Chapter 3 - The exemptions  

Part 3-1 - Supplies that are not taxable supplies  

Division 38 - GST-free supplies  

Subdivision 38-N - Grants of land by governments  

38-450   Leases preceding grants of freehold and similar interests by governments  

(1)    
A supply by the Commonwealth, a State or a Territory of land on which there are no improvements is GST-free if:

(a) the supply is by way of lease (other than *long-term lease); and

(b) the lease is subject to conditions the satisfaction of which will entitle the * recipient of the supply to the grant of a freehold interest in the land or a long-term lease of the land.

(2)    
A supply consisting of the surrender, to the Commonwealth, a State or Territory, of a lease over land is GST-free if:

(a) the supplier acquired the land under a supply that:

(i) was GST-free under subsection (1) ; or

(ii) if the supply was made before 1 July 2000 - would have been GST-free under subsection (1) if it had been made on or after that day; and

(b) solely or partly in return for the surrender of the lease, the Commonwealth, State or Territory makes a supply of the land to the supplier that is GST-free under section 38-445 .