ATO Interpretative Decision
ATO ID 2002/970
Goods and Services Tax
GST and the supply of long-term accommodation in a university residential college to non-studentsFOI status: may be released
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Can the entity, a university, apply the concessional treatment in section 87-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies commercial accommodation in a university residential college to a non-student, for a continuous period of 28 days or more?
Decision
Yes, the entity can apply the concessional treatment in section 87-5 of the GST Act when it supplies commercial accommodation in a university residential college to a non-student, for a continuous period of 28 days or more.
Facts
The entity is a university. The entity is not a charitable institution or a gift-deductible entity.
The entity supplies a non-student with commercial accommodation in its residential college for a continuous period of 28 days or more in the same premises.
At least 70% of the non-students are provided with commercial accommodation in the residential college for periods of 28 days or more.
To the extent that the university residential college is used to provide accommodation to non-students, it is 'commercial residential premises' as defined in section 195-1 of the GST Act commercial residential premises (see ATO ID 2002/969).
The entity is registered for goods and services tax (GST). The supply of commercial accommodation in the university residential college satisfies the other positive limbs of section 9-5 of the GST Act.
Reasons for Decision
Section 87-5 of the GST Act provides a concessional treatment where:
- •
- there is taxable supply of commercial accommodation;
- •
- the accommodation is provided in commercial residential premises that are predominantly for long-term accommodation; and
- •
- the accommodation is provided to an individual as long-term accommodation.
Taxable supply of commercial accommodation
A supply is a taxable supply where the elements of section 9-5 of the GST Act are met. The entity is registered for goods and services tax (GST). The supply of commercial accommodation in the university residential college satisfies the other positive limbs of section 9-5 of the GST Act. Therefore, the supply is a taxable supply.
Commercial residential premises that are predominantly for long-term accommodation
The term 'commercial residential premises' is defined in section 195-1. To the extent that the university residential college is used to provide accommodation to non-students, it is 'commercial residential premises' as defined in section 195-1 of the GST Act (see ATO ID 2002/969). Therefore, the supply of accommodation is provided in commercial residential premises.
Under subsection 87-20(1) of the GST Act, long-term accommodation is provided to an individual if commercial accommodation is provided for a continuous period of 28 days or more, in the same premises.
The entity supplies the non-student with commercial accommodation in its residential college for a continuous period of 28 days or more in the same premises. This means that the entity provides long-term accommodation to that student.
Subsection 87-20(3) of the GST Act provides that commercial residential premises are predominantly for long-term accommodation if at least 70% of the individuals who are provided with commercial accommodation in the premises are provided with long-term accommodation.
As at least 70% of the non-students are provided with accommodation in the university residential college for periods of 28 days or more, the premises provided to non-students are predominantly for long-term accommodation.
Accommodation is provided to an individual as long-term accommodation
The entity supplies the non-student with commercial accommodation in its residential college for a continuous period of 28 days or more. This means that the accommodation is provided to an individual as long-term accommodation.
Accordingly, all the elements of section 87-5 of the GST Act are satisfied. Therefore, the entity can apply the concessional treatment available under that section, when it supplies commercial accommodation in a university residential college to a non-student for a continuous period of 28 days or more.
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 9-5
paragraph 40-35(1)(b)
section 87-5
subsection 87-20(1)
subsection 87-20(3)
section 195-1
ATO ID 2002/969
ATO ID 2002/971
Other References:
The Macquarie Dictionary, 1997, 3rd edn, The Macquarie Library Pty Ltd, New South Wales.
Keywords
Goods and services tax
GST education
Student accommodation - tertiary
GST property & construction
GST commercial residential premises
GST long term accommodation
GST residential premises
GST residential rents
GST long term accommodation
GST residential premises
ISSN: 1445-2782
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