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Edited version of your written advice
Authorisation Number: 1051498529735
Date of advice: 25 March 2019
Ruling
Subject: GST and the supply of short term accommodation
Question
Are your supplies of short term accommodation input taxed?
Answer
Yes.
The scheme commences on:
xx/xx
Relevant facts and circumstances
You provide short term accommodation in residential premises.
You have treated your provision of short term accommodation as input taxed because each is a separate residential premises. All premises were purchased from private individuals at different dates and none of them has been substantially renovated within the past 5 years.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 sections 40-65; 40-75
Reasons for decision
A supply of residential premises by way of lease, hire or licence is generally taxable if the supply is of:
● commercial residential premises, or
● accommodation in commercial residential premises provided to an individual by the owner or controller of the premises.
"Commercial residential premises" include a hotel, motel, inn, hostel, boarding house, caravan park and camping ground. The definition also includes anything similar to these premises.
Goods and services tax ruling: commercial residential premises (GSTR 2012/6) considers how section 9-5, Subdivision 40-B, and Subdivision 40-C of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) apply to supplies of commercial residential premises and supplies of accommodation in commercial residential premises.
Of relevance to your situation are paragraphs 13-40 of GSTR 2012/6 which describe the features of hotels, motels, inns, hostels and boarding house.
According to the facts provided and to the definition of the above terms in GSTR 2012/6 the terms hotel, motel, inn, hostel, boarding house do not apply to your situation to make your supplies of accommodation taxable.
GSTR 2012/6 is available for perusal on our website at www.ato.gov.au
GST and residential premises
Subsection 40-65(1) of the GST Act provides that the sale of residential premises is an input taxed supply.
However, subsection 40-65(2) of the GST Act excludes the supply of new residential premises from being an input taxed supply to the extent that the residential premises are:
● commercial residential premises, or
● new residential premises other than those used for residential accommodation before 2 December 1998.
In this case the premises are not considered to be commercial residential premises.
Among other things subsection 40-75(1) of the GST Act defines residential premises as
new residential premises where they have not previously been sold as residential premises or have been created through substantial renovations of the building.
The premises have previously been sold as residential premises and none of your properties has been extensively renovated within the last 5 years.
Therefore, the sales of your properties are also input taxed.