The Federal Court has held that a sub-lease of student accommodation was a supply of commercial premises and that supplies of accommodation to 3 individuals were taxable supplies.
The taxpayer, the trustee of the Nest Southbank Unit Trust (NSUT), developed student accommodation and serviced apartments at a Southbank site in Brisbane – Urbanest Southbank (the Urbanest premises). The Urbanest premises consisted of 132 shared apartments, 27 studio apartments and various common areas.
The Court had to decide whether each of 4 particular supplies of premises at the Urbanest premises were supplies of “commercial residential premises” or accommodation in “commercial residential premises” (and thus a taxable supply under s 9-5 of the GST Act).
- The first of the relevant supplies involved the sub-lease of the Urbanest premises by NSUT to the trustee of the Urbanest Southbank Leasing Trust (USLT), the second respondent in the case.
- The second and third supplies concerned the provision of accommodation to a Mr O’Leary (in a single occupancy study/bedroom) and a Ms Guiloff (in a double occupancy study/bedroom), respectively, pursuant to Rooming Accommodation Agreements which each of them entered into with USLT.
- The fourth supply related to the supply of a premium studio apartment to a Mr Chairatna pursuant to a Studio Accommodation Agreement.
The Court considered that the services provided by staff to residents through the reception desk were “by no means insignificant” and, along with all other relevant matters, the Court came to the conclusion that the Urbanest premises were properly regarded as commercial residential premises for the purposes of the GST Act.
The Court said it was not disputed by the Commissioner that USLT controlled the Urbanest premises at the time it supplied accommodation to Mr O’Leary, Ms Guiloff and Mr Chairatna. In the case of each of these supplies, the Court said there was a supply by the entity (USLT) that controlled the commercial residential premises (the Urbanest premises) of accommodation in such premises to an individual. Accordingly, it held the supplies of accommodation to the 3 individuals were not input taxed and were thus taxable supplies.
(ECC Southbank Pty Ltd as trustee for Nest Southbank Unit Trust & Anor v FCT [2012] FCA 795, Federal Court, Nicholas J, 31 July 2012.)
[LTN 148, 2/8]