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Ruling
Subject: GST and long-term caravan parking
Question 1
Are the customers of the caravan park classed as long-term accommodation given that they are restricted on how many days they can stay in the park?
Answer
Yes.
Question 2
If the underlying supply is classed as a supply of long-term accommodation is the GST charged at 10% for the first 27 days then charged at 5.5% for the remainder of the year's booking or is it charged at a flat 5.5%?
Answer
The GST is charged at 10% for the first 27 days then charged at 5.5% for the remainder of the year's booking.
Question 3
In calculating the concessional component of the supply, is the consideration paid by the annual stayers pro-rated across the full year or 89 days only?
Answer
The consideration is pro-rated across a full year.
Relevant facts and circumstances
You are trying to determine if your supplies to caravan park annual stayers are classed as supplies of long-term accommodation. The annual stayers book the site and pay for a full year and can stay during that year, whenever they like, but within a set maximum of days. The van remains on site for the period of the year during which they are not staying there. You advised by telephone that you have assessed that you do not supply predominantly long-term accommodation. However the vans in question are in long-term stay sites.
You are unsure as to whether they would still be classed as long term given that they are restricted to a maximum number of days within the year and therefore cannot use their caravan whenever they choose even though the van stays on site.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 87-20
Reasons for decision
Issue 1
Question 1
Summary
The annual stayers are regarded as staying in long-term accommodation as the site is hired for the caravan for a year.
Detailed reasoning
In analysing long-term accommodation the Commissioner accepts that it is not necessary for a guest to occupy premises for the entire duration of the stay for the stay to be continuous.
Annual stayers in your park book a site and pay for a full year, albeit with a restricted occupancy period. In the case of a caravan park, the right to occupy is granted when a site is hired for a caravan, even if the caravan is left unoccupied for most of the time. This means that the concessional treatment for long-term accommodation applies to supplies made to those who leave their caravans on site for an extended period at a caravan park.
Where the annual stayers pay for a full year, the supply which you make to them is that of long-term accommodation. The restriction to actual occupancy is considered to be a term or condition of the lease in cases where actual occupancy is not charged out separately from the charge for site occupancy. Even when you move a caravan from one site to another within the park for convenience, but maintain the booking, this will count as continuous site rental.
If you and the owner of a caravan agree to 'store' the caravan in another area of the park which is not suitable for occupation, for an agreed fee, the continuity of the site rental ceases when the caravan is moved. The storage of the caravan is a separate supply, subject to the basic rules. The concession for long-term accommodation is not available in respect of the storage arrangement.
Question 2
Summary
The first 27 days of the annual stay is charged at 10% GST. The remainder attracts GST at the 5.5% concessional rate.
Detailed reasoning
You stated that you do not provide 'predominantly long-term' accommodation, in this case, you can choose to:
o charge GST on:
o the full value of the supply for the first 27 days of continuous accommodation of long-term guests; plus
o a reduced value (that is, 50% of the GST inclusive price of the long-term accommodation) from the 28th day of the stay; or
o treat all of these supplies as input taxed in the same way as residential rent.
The concessional rate only applies to the 28th day of the supply onwards.
Question 3
Summary
Where a lease is for a full year the consideration is pro-rated across the full year.
Detailed reasoning
You have stated that your annual stayers book a site and pay for a full year. Where this is the case and a flat or all-in rate is charged, the fee charged is considered to cover the whole year, rather than just the restricted actual occupancy term. As stated above, long-term stays are contemplated as having occasions where there is no actual occupancy within a period of letting.