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  • 3.4 Strata title holders

    3.4.1 When does the letting of strata titled accommodation fall within the scope of 'commercial accommodation'?

    For source of ATO view, refer to GSTR 2012/6 Goods and services tax: commercial residential premises.

    ATO position

    The letting of strata titled accommodation will be a supply of accommodation in commercial residential premises when the main characteristics of commercial residential premises listed in GSTR 2012/6 are met. Satisfying the characteristics of 'central management', 'management offers accommodation in its own right' and 'multiple occupancy' will generally not be met by strata titled accommodation.

    To establish central management and that management offers accommodation in its own right, the manager will have to show that control over the premises exists. The test for control is whether the manager holds a lease or licence over the premises or has been granted rights that give the manager a legal interest in the premises. Therefore, a distinction has to be made between:

    (a) managers who hold a lease or licence from the owner (control exists); and
    (b) managers who are allowed to let premises on the owner's behalf under the terms of an agreement or arrangement and the manager merely collects rent on behalf of the owners (control does not exist).

    To establish multiple occupancy, the manager will have to show that the premises provide sleeping accommodation to a number of guests in separate apartments/units etc at one time. The letting of a privately owned holiday apartment/unit through a local real estate agent will not satisfy the multiple occupancy characteristic. The letting of a privately owned holiday apartment/unit together with other holiday apartments/units in a complex through an on-site agent may satisfy the multiple occupancy characteristic as the manager aggregates these units/apartments under their own control so that this characteristic is met. However, the central management characteristic is not satisfied (that is, the manager does not hold a lease or licence nor granted rights over the units). See also paragraphs 95 to 98 of GSTR 2012/6.

      Last modified: 19 Jun 2015QC 16478