Goods and Services Tax Industry Issues
Property and Construction Industry Partnership

Are all boarding houses treated as 'commercial residential premises'?

• Please note that the PDF version is the authorised version of this ruling.
  This publication is extracted from section 03 - commercial residential premises of the Property and Construction Industry Partnership - issues register. See issue 3.1.2 of that register. This publication should be read in conjunction with the related content of that register where further context is required.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

This publication provides you with the following level of protection: This publication (excluding appendixes) is a public ruling for the purposes of the Taxation Administration Act 1953. A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. If you rely on this ruling, the Commissioner must apply the law to you in the way set out in the ruling (unless the Commissioner is satisfied that the ruling is incorrect and disadvantages you, in which case the law may be applied to you in a way that is more favourable for you - provided the Commissioner is not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you.

ATO position

1. The definition of 'commercial residential premises' in paragraph 195-1(a) of the GST Act specifically includes a 'boarding house'. However, in some States of Australia the State legislation requires the guest and provider to enter into a Residential Tenancy Agreement, in some circumstances. In such cases, the premises exhibit characteristics that take them out of the class of 'boarding houses' for the purposes of paragraph (a) of the definition.

2. Although they bear the name, 'boarding house', they are not. In effect they are very similar to residential flats. It is noted in GSTR 2000/20 that 'guests' have the right to occupy and enjoy the premises, but not to the extent of having a legal interest in the premises. However, if a residential tenancy agreement exists, the individuals would have a legal interest in the premises and do not have the status of 'guest'. Furthermore, the managers do not have 'control' over those parts of the premises that are subject to the residential tenancy agreements.

References