The ATO on Wed 19.12.2012, issued 3 GST Rulings on GST and residential premises (GSTR 2012/5), GST and commercial residential premises (GSTR 2012/6), and GST and long-term accommodation in commercial residential premises (GSTR 2012/7).
- GST and residential premises – GSTR 2012/5 broadly considers how Subdivs 40-B and 40-C of the GST Act apply to supplies of residential premises. It indicates that premises are residential premises and satisfy the definition in s 195-1 where they are occupied as a residence or residential accommodation regardless of the term of occupation.
Specifically, the Ruling states that the requirement in ss 40-35, 40-65 and 40-70 that premises be used predominantly for residential accommodation is to be interpreted as a single test that looks to the physical characteristics of the property to determine the premises’ suitability and capability for residential accommodation. It further states that the requirement for residential premises to be used predominantly for residential accommodation does not require an examination of the subjective intention.
- GST and commercial residential premises – GSTR 2012/6 largely considers how the GST Act applies to supplies of commercial residential premises and supplies of commercial residential premises. It generally states that a supply by way of sale or lease of commercial residential premises (which satisfies the definition under s 195-1) is a taxable supply. A supply of accommodation in commercial residential premises provided to an individual by the entity that owns or controls the commercial residential premises is also a taxable supply, according to the Ruling.
The Ruling notes that the definition under s 195-1 expressly includes premises to the extent that they are used to provide accommodation to students in connection with an education institution that is not a school. It also provides multiple examples and a detailed explanation of features which indicate a premises is not a hotel, motel, inn, hostel, boarding house, or similar premises.
- GST and long-term accommodation in commercial residential premises – Among other things, GSTR 2012/7 considers how Div 87 and s 40-35 of the GST applies to supplies of long-term accommodation in commercial residential premises. It states that commercial accommodation is the right to occupy the whole or any part of the commercial residential premises for living accommodation (including lodging, sleeping or overnight accommodation), and does not require any degree of permanence of occupation.
According to the Ruling, for commercial accommodation to be provided to an individual as long-term accommodation, it is only necessary for the supply of commercial accommodation to be made to an entity for 28 days or more, under the terms of agreement, to be able to be taken up by an individual. Further, it states that it is not necessary for the accommodation to be actually taken up by the individual.
The Rulings were previously released as Draft GST Ruling GSTR 2012/D1. Due to the release of the above Rulings, the ATO has also withdrawn the following with effect from Wed 19.12.2012:
- GST Ruling GSTR 2000/20: Commercial residential premises;
- GST Bulletin GSTB 2003/2: Long-term accommodation at marinas;
- GST Industry Issues GSTII PC1: Are all boarding houses treated as “commercial residential premises”?
- GST Industry Issues GSTII PC2: Input tax credits – input taxed supply or taxable supply;
- GST Industry Issues GSTII PC3: Separately titled garage – supplied with a residential unit;
- GST Industry Issues GSTII PC4: Separately titled garage – not sold with a residential unit; and
- GST Industry Issues GSTII PC5: Supply by way of lease – input taxed supply or taxable supply.
DATE OF EFFECT: The Rulings apply both before and after their date of issue.
[LTN 246, 19/12]