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  • Issue 22 - Commercial residential premises - cruise ships, house boats, home stays, marinas, retirement villages/nursing homes and holiday units

    Accommodation may be provided on cruise ships, house boats, home stays, marinas, retirement villages/nursing homes, or holiday units.

    Issue

    Does 'commercial residential premises' include cruise ships, house boats, home stays, marinas, retirement villages/nursing homes or holiday units?

    For source of ATO view, refer to the general application of the principles in GSTR 2012/5External Link Goods and services tax: residential premises and GSTR 2012/6External Link Goods and services tax: commercial residential premises.

    Decision

    Cruise ships: Yes. Cruise ships fall under paragraph (d) of the definition of commercial residential premises set out in Issue 20 - Commercial accommodation. The special treatment for long term stays (28 days or more) applies to accommodation offered on ships used for entertainment or transport, such as cruise ships.

    House boats: Usually yes, unless they are 'floating homes'. Floating homes, by their definition, are structures composed of a floating platform and a building, designed to be occupied as a residence that is permanently affixed to the platform. It does not include any structure that has means of, or is capable of being readily adapted for, self-propulsion. Houseboats, by contrast, are generally self-propelled and therefore fall under the category of 'ships'. Commercial residential premises can include ships that are let out for hire in the ordinary course of a business of letting ships out for hire, or providing ships for entertainment or transport.

    Home stays: Usually no. Home-stays, where guests have the use of a private home, are not ordinarily provided in commercial residential premises and accordingly such a supply will be an input taxed supply of residential premises. They do not display the important characteristics of commercial residential premises such as multiple occupancy and/or commercial intention (referred to in Issue 20 - Commercial accommodation).

    Marinas: Yes. 'Commercial residential premises' is defined in the GST Act to include:

    a marina at which one or more of the berths are occupied, or are to be occupied, by ships used as residences.

    Retirement villages or nursing homes: No. A separate guideline relating specifically to Retirement Villages is published on the ATO website under Retirement Villages Industry Partnership.

    Holiday units: Some holiday units fall within the definition of commercial residential premises, if they are operated in a similar manner to a hotel. Holiday units that display the characteristics referred to in the answer in Issue 20 - Commercial accommodation, will be commercial residential premises.

    The supply of a holiday unit by an owner to a central management entity operating a hotel or accommodation service will be a supply of residential premises. When the unit is aggregated by the central management entity with other units and let to the public it will then usually constitute a supply of accommodation in commercial residential premises.

    Holiday units supplied for holiday accommodation by the owner directly or through a letting agent will not usually fall into this category. Holiday homes and apartments that are for the owner's use, made available to family or friends and let out when not in use are residential premises.

    Strata and other separately titled residential premises retain their character as residential premises when sold and such a sale constitutes an input taxed supply, regardless of whether the premises are located within the precincts of commercial residential premises. The only exception to this is the sale of new residential premises (other than those used for residential accommodation before 2 December 1998), which are excluded from input taxing. (See paragraph 98 of Goods and Services Tax Ruling GSTR 2012/6External Link and paragraph 58 of Goods and Services Tax Ruling GSTR 2012/5External Link). The meaning of new residential premises is set out in section 40-75 of the GST Act.

    References

    See Appendix 1 to GSTR 2012/6External Link - Goods and services tax: commercial residential premises. See also the definition of 'commercial accommodation' at paragraph 6 of GSTR 2012/7External Link - Goods and services tax: long-term accommodation in commercial residential premises.

      Last modified: 23 May 2013QC 17686