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  • Market valuations

    The benchmark market values are general market values to use if you don't have a market valuation. If you have a current independent market valuation for your supply, you must use it, unless you qualify to use the transitional arrangements for market valuations.

    An independent market valuation may include a valuation by a licenced valuer or a real estate agent, but doesn't include internal market valuations. If you have a licenced valuer's market valuation, you must use that valuation unless you're eligible to use the transitional arrangements for market valuations.

    Your options for determining if a supply is for nominal consideration depends on when the independent market valuation was done.

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    Transitional arrangements for market valuations

    If you had an independent market valuation, but use the benchmark market values instead to determine if your supply is for nominal consideration, you have a transition period until 30 June 2023. If you were making that supply before 1 January 2019, you may use any of the following:

    After 30 June 2023, you can't use the benchmark market values if you have an independent market valuation that's less than four years old.

    CPI adjusted market valuation

    If you have an independent market valuation that's less than four years old, you can adjust that valuation by CPI (use the All Groups CPI, quarterly changeExternal Link table on the Australian Bureau of Statistics (ABS) website) and use that figure to determine if your supply is made for nominal consideration.

    Short-term accommodation and meals

    For short-term accommodation and meals, you can use the CPI Weighted average of eight capital citiesExternal Link on the ABS website to adjust your valuation by CPI.

    Long-term accommodation

    For long-term accommodation you can use:

    To adjust your valuation for CPI by using the rents component of the Housing Group CPI:

    • go to the ABS consumer price index page
    • go to the Data Downloads tab
    • download the spreadsheet for Table 11 (you may need to 'Show all data' to see Table 11)
    • find the row relating to rents for the capital city in your state or territory and select the link in the series ID column. This takes you to the column of quarterly CPI changes for rents for that capital city
    • go to the end of the column and find the quarter that your market valuation was made
    • go to the next row (the following quarter) and adjust your market valuation by the percentage shown
    • repeat this for each quarter up to the quarter you require the CPI adjusted market valuation for.

    Current year valuation

    If you have an independent market valuation for the supply for the current year, you must use that valuation. You can't use the benchmark market values.

    Valuation one to four years old

    If you have an independent market valuation for a previous year that's less than four years old, you can't use the benchmark market values.

    To determine if your supply is for nominal consideration, you can do one of the following:

    Valuation more than four years old

    If the independent market valuation is more than four years old, and you don't have a more recent independent market valuation, you can do any of the following:

    Benchmark market values

    Benchmark market values are amounts we consider are reasonable GST-inclusive market values for accommodation, board and quarters and meals.

    The benchmark market values are updated annually, and new values take effect from 1 July each year.

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    Eligible organisations and supplies

    You may use benchmark market values if you are an endorsed charity and supply one of the following types of supplies:

    • supported accommodation and community housing (long-term accommodation rates)
    • crisis care (short-term and long-term accommodation as appropriate)
    • accommodation in a retirement village that doesn't meet the definition of 'retirement village' in section 195-1 of the GST Act (long-term accommodation)
    • residential housing (long-term accommodation)
    • meals on wheels, charity soup kitchens meals or meals to the frail, homeless or needy (meals).

    If you're eligible to use the benchmark market values but choose not to, you must use the market value guidelines or get a market valuation.

    Ineligible organisations and supplies

    The benchmark market values don't apply for the following:

    • campsite accommodation
    • university halls and residential colleges (if you're a residential college, see Supplies for residential colleges)
    • boarding schools
    • non-residential buildings, such as halls and offices
    • meals supplied through a school tuckshop.

    If you have an independent market valuation that's less than four years old, you can't use the benchmark market values unless the transitional arrangements for market valuations apply.

    How to use the benchmark market values

    The benchmark market value for each type of supply is the GST-inclusive market value.

    You cannot average the benchmark market value when you provide different service types or provide services across a range of locations, for example:

    • you cannot use short-term accommodation benchmark market values for a capital city and other country centres to get an average value for all short-term accommodation
    • you cannot use long-term accommodation benchmark market values for a one bedroom unit, a two bedroom unit and a three bedroom unit in the same building to get an average value for all accommodation in that building.

    You cannot use benchmark market values if you have an independent market valuation for the supply within the last four years unless the transitional arrangements for market valuations apply.

    Benchmark values for types of supplies

    How to use the benchmark market values for the type of supply:

    Short-term accommodation benchmark market values

    The supply of short-term accommodation by an eligible organisation can be treated as GST-free if the consideration for the supply is less than 75% of the relevant benchmark market value.

    See Short-term accommodation and meals tables for benchmark market values for short-term accommodation.

    Short-term board and quarters benchmark market values

    If you supply short-term full board, it's made up of two components – accommodation and meals (food). There are different rates to measure nominal consideration for each of these components and you need to apportion the fee to the accommodation and food components. See Charging one fee for accommodation and food.

    Long-term accommodation benchmark market values

    The supply of long-term accommodation by an eligible organisation can be treated as GST-free if the consideration for the supply is less than 75% of the relevant benchmark market value.

    From 1 July 2018, we updated how we determine the benchmark market values for long-term accommodation to provide more detailed information:

    Transitional arrangements for long-term accommodation

    The transition period to 30 June 2023 for moving to the detailed benchmark market values, depends on the situation.

    You can use either the Transitional benchmark market values or the Detailed benchmark market values if you were either:

    • providing long-term accommodation in those premises before 1 January 2019, or
    • commercially committed to construction of premises before 1 January 2019 –meaning you entered into a legally binding contract with a builder for construction before 1 January 2019, that will be used to provide long-term accommodation.

    The detailed benchmark market values and transitional benchmark market values may increase or decrease from year to year depending on market conditions.

    You may use the relevant benchmark market value for the period between entering into the tenancy agreement or undertaking a rent review and the date of the next rent review date. If the benchmark market value increases, you can use the higher value from the date it applies to determine if your supply of long-term accommodation is GST-free.

    If you are eligible to use the transitional benchmark market values, you can only use them until 30 June 2023. From 1 July 2023, you must use the detailed benchmark market values regardless of when the tenancy agreement was entered into or when the rent review was undertaken.

    If you're not eligible to use the transitional benchmark values, you can only use the Detailed benchmark market values.

    Detailed benchmark market values

    The Detailed long-term accommodation tables provide detailed benchmark market values for different types of long-term accommodation in different zones in the states and territories.

    The benchmark market values may increase or decrease from year to year depending on market conditions.

    You can use the detailed benchmark market values published at the time you enter into the tenancy agreement for the duration of the tenancy agreement.

    Long-term board and quarters benchmark market values

    If you supply long-term full board, it is made up of two components – accommodation and meals (food). There are different rates to measure nominal consideration for each of these components and you need to apportion the fee to the accommodation and food components. See Charging one fee for accommodation and food.

    Meals benchmark market values

    The supply of meals by an eligible organisation can be treated as GST-free if the consideration for the supply is less than 50% of the relevant benchmark market value.

    If your organisation supplies meals to another organisation, such as a hospital, you can't use the benchmark market values. This is because your organisation does not provide the meals to the frail, homeless or needy.

    If your organisation purchases food and then provides it to someone else, the market value is the cost of the food you purchased, rather than the benchmark market value for meals.

    The benchmark market values for meals not purchased at board and lodging establishments are shown in Short-term accommodation and meals tables.

    Charging one fee for accommodation and food

    When one fee is charged for both the accommodation and food, apportion the fee to the accommodation and food components. You then compare the individual components to the benchmark market values for accommodation and food respectively to determine if either, or both, the supply of accommodation or food is GST-free.

    The supply of the:

    • accommodation is GST-free if the consideration for that component of the supply is less than 75% of the relevant benchmark market value
    • food is GST-free if the consideration for that component of the supply is less than 50% of the relevant benchmark market value.

    If your organisation purchases food and then provides it to someone else, the market value is the cost of the food you purchased, rather than the benchmark market value for meals.

    How to apportion your fee

    You can use any reasonable method to apportion the fee between the food and accommodation components. We have set out a method below that you may choose to use, as follows:

    • Add together the applicable benchmark market values for food and accommodation to get a total benchmark market value. If you are supplying long-term accommodation, check if the transitional arrangements apply.
    • Calculate the benchmark market value for accommodation and the benchmark market value for food as a percentage of the total benchmark market value.
    • Use these same percentages to apportion the total fee charged between food and accommodation.

    For short-term accommodation, you may also use the rates in Short-term accommodation and meals tables as the benchmark market value for emergency or crisis accommodation where the supply is a combination of short-term accommodation and meals.

    Example

    During 2021–22, Emergency Community Care provides emergency accommodation in their Albury hostel. In addition to the accommodation, they provide breakfast and dinner. Their clients contribute $132.00 per day.

    Emergency Community Care looks up the short-term accommodation table for Albury in New South Wales:

    • The accommodation rate for Albury is $134.00.
    • Breakfast at $26.15 plus dinner at $51.50 for Albury equals $77.65.

    The total benchmark market value for a day in Albury is therefore $211.65 ($134.00 + $77.65).

    The accommodation component is 63.31% of the total benchmark market value ($134.00 ÷ $211.65 × 100) and the meals component is 36.69%.

    Emergency Community Care apportion their charges for Albury as follows:

    • accommodation component is 63.31% × $132.00 = $83.57
    • meals component is 36.69% × $132.00 = $48.43.

    Emergency Community Care compare their apportioned charges with the benchmark market values:

    • The accommodation component ($83.57) is 62.37% of the benchmark value ($134.00), so accommodation in Albury is GST-free.
    • The meals component ($48.43) is 62.39% of the benchmark value ($77.65), so meals in Albury are not GST-free. They are a taxable supply.
    End of example
      Last modified: 22 Oct 2021QC 32370