GST and tax return services for non-resident property owners
This explains the GST treatment of services for the preparation of tax returns containing income or deductions that relate to an Australian rental property.
From 1 April 2005, tax return preparation services you supply to a non-resident owner of a rental property are subject to GST if the owner intends to either:
- rent the property
- sell the property (excluding the sale of new residential premises).
These services are subject to GST regardless of whether:
- the owner's tax return includes income or deductions from other sources or activities
- part of the property is commercial premises.
You must include GST on tax invoices you provide to non-resident property owners and report the GST you are liable to pay on your activity statement.
Caroline, a non-resident of Australia, has owned a building in Australia since 1995. The building has two levels with commercial premises on the ground level and residential premises on the upper level.
During the financial year ending 30 June 2005, Caroline leases both the commercial and residential premises and derives income and incurs deductions in relation to the property. As a result, Caroline is liable to pay income tax in Australia.
In August 2005, Caroline engages Jim (a GST registered tax agent) to prepare her Australian income tax return for the year ending 30 June 2005. Jim takes into account Caroline's income from both commercial and residential leasing when he prepares her tax return.
Jim's supply of tax return preparation services to Caroline is subject to GST. Jim must pay GST on the whole of his services, not just those aspects of his services relating to the residential part of Caroline's building.
Caroline may be entitled to register for GST and claim a partial GST credit for the GST she pays in the price of Jim's services that relates to the leasing of the commercial part of the building.
End of example
Explains the GST treatment of tax agent services including the preparation of tax returns containing income derived or deductions incurred in relation to a non-resident's Australian rental property.