Edited version of private advice

Authorisation Number: 1052067131720

Date of advice: 6 December 2022

Ruling

Subject: GST - commercial residential

Question 1

Is the short-term/holiday accommodation provided at Unit <number>, <property address> (Premises) located within the <resort name> a taxable supply of commercial residential premises pursuant to section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

No.

Question 2

Are you required to be registered for GST?

Answer

No.

Question 3

If you are entitled to claim input tax credits for the acquisitions made in supplying the short-term/holiday accommodation located at the Premises, can you backdate the start date of your GST registration beyond 4 years?

Answer

Not applicable in this case. As your supply of short-term accommodation provided at the Premises is an input taxed supply of residential premises pursuant to subsection 40-35(1), you are not required to pay GST on your supply of accommodation and you are not entitled to an input tax credit for anything acquired or imported to make the supply of accommodation.

This ruling applies for the following periods:

1 July <year> to 30 June <year>

The scheme commences on:

<date>

Relevant facts and circumstances

The <entity name> (ABN <number>) (you) are currently not registered for GST.

Your corporate trustee is <company name>.

On <date> (settlement date), you purchased vacant land located at <property address> within the <resort name> (the Resort).

On <date>, you entered a building and construction contract with builder <company name> to construct a dwelling/building designed to be used as two separate residential chalets on the vacant land for $<amount>.

One chalet comprises two bedrooms plus study/additional bedroom, two bathrooms, laundry, kitchen, family/meals, living room and two car spaces. The other chalet comprises one bedroom, one bathroom, living/kitchen, mud room and one car space. Whilst the cabins share a common wall they are not interconnecting. Collectively the chalets will be here forth referred to as the Premises.

You supplied a copy of the floor plan of the Premises which illustrates the physical characteristics of the Premises.

The resort is zoned "SP3 Tourist" as per the <name> Local Environmental Plan 2013 (map <name>). Development within the 'SP3 Tourist' zone is limited to tourist-oriented development and related uses and includes tourist and visitor accommodation. The occupancy certificate issued by the local council provides your Premises a six-bed licence for use as tourist and visitor accommodation only.

On <name> you entered into a 'Letting Agreement' with <company name> (ACN<number>) (the Resort Manager) granting them the exclusive right and privilege to market, manage and hire out the Premises for a fee to the public for holiday and short-term accommodation on your behalf as well as provide other services to guests in its own right in relation to the operation of the Resort (the Letting Agreement).

You supplied a copy of the 'Letting Agreement' comprising of all its clauses, schedules and annexures for the purpose of the ruling application.

The Resort manager has entered into similar arrangements with other proprietors of premises located withing the Resort.

The Resort Manager is an unrelated third party to you.

Accommodation/services

Your Premises, consisting of two the chalets, are fully furnished and include standard room facilities such as telephone and cable/satellite TV and includes a delegated car space for each chalet.

Linen and towels, washing and dishwashing liquid, crockery, cutlery, cooking utensils, saucepans, iron and ironing board, tea and coffee-making facilities are also provided in the accommodation.

The chalets are cleaned weekly and/or on departure of a guest by the Resort Manager. A daily service is not included, to keep charges minimal. However, for an additional low fee, a daily service to refresh the room can be organised by contacting reception.

Accommodation is charged at a daily rate and a minimum stay applies. As per Schedule 2 clause 1 of the Letting Agreement, the Premises hire or letting fee rate is formulated by the Resort Manager (not you).

Daily breakfast is included in the above-mentioned tariff; however it is noted that, 'Room Revenue" as defined in the Letting Agreement and which is used to calculate the 'Owners Return' (your return) excludes package items including but not limited to breakfast, spa treatments etc.

Activities offered by the Resort include; spa and wellness centre, 9-hole par 3 golf course, trampolines, fitness and mountain bike tracks, <general store name> and gift shop, two restaurants, BBQ and outdoor dining tables, archery, gym, sauna and indoor heated swimming pool, tennis courts, meeting and conference facilities etc. These activities/facilities offered at the resort, including the reception area, are managed and operated by the Resort Manager and/or another third party in their own right.

The Premises is advertised as short-term accommodation and can be booked online via the Resort's website (<website address>).

Predominantly, guests staying in the Resort, including your Premises, are travellers who have their principal place of residence elsewhere.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 9-5

A New Tax System (Goods and Services Tax) Act 1999 section 9-20

A New Tax System (Goods and Services Tax) Act 1999 section 9-40

A New Tax System (Goods and Services Tax) Act 1999 section 23-5

A New Tax System (Goods and Services Tax) Act 1999 section 40-35

A New Tax System (Goods and Services Tax) Act 1999 section 188-10

A New Tax System (Goods and Services Tax) Act 1999 section 188-15

A New Tax System (Goods and Services Tax) Act 1999 section 188-20

A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision

In this ruling,

•         unless otherwise stated, all legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)

•         all legislative terms of the GST Act marked with an asterisk are defined in section 195-1 of the GST Act.

•         all reference materials, published by the Australian Taxation Office (ATO), that are referred to are available on the ATO website ato.gov.au

Issue 1

Question 1

Is the short-term/holiday accommodation provided at Unit <number>, <property address> (Premises) located within the <Resort name> a taxable supply of commercial residential premises pursuant to section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Detailed reasoning

Section 9-40 provides that you are liable for GST on any taxable supplies that you make.

You make a taxable supply where you satisfy the requirements of section 9-5, which provides:

You make a taxable supply if:

a)    the entity makes the supply for consideration

b)    the supply is made in the course or furtherance of an enterprise that the entity carries on

c)    the supply is connected with Australia, and

d)    the entity is registered, or required to be registered, for GST

However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

The issue in this case is whether your supply of the Premises is input taxed under division 40. Input taxed means that GST is not payable on the supply and there is no entitlement to an input tax credit for anything acquired to make the supply.

Division 40 deals with input taxed supplies and section 40-35 (which deals with residential rent) relevantly provides as follows:

(1)  A supply of premises by way of lease, hire or licence (including a renewal or extension of a lease, hire or licence) is input taxed if:

(a)  the supply is of *residential premises (other than a supply of *commercial residential premises or a supply of accommodation in commercial residential premises provided to an individual by the entity that owns or controls the commercial residential premises); or

(b)  ......

(1A) ...

(2)  However:

(a)  The supply is input taxed only to the extent that the premises are to be used predominantly for residential accommodation (regardless of the term of occupation); and

(b)  ...

As seen from section 40-35, it is necessary to determine whether or not you are supplying residential premises, and if so, whether what you are supplying are also commercial residential premises or accommodation in commercial residential premises provided to an individual where you either own or control the commercial residential premises.

If you are supplying residential premises to be used predominantly for residential accommodation, which are not commercial residential premises, then your supplies will be input taxed. However, a supply by way of lease, hire or licence of commercial residential premises would generally be a taxable supply.

For completeness, it is noted that you are not supplying long-term accommodation as your guests only stay for short-term stays.

Residential premises

Section 195-1 provides that 'residential premises' means land or a building that: (a) is occupied as a residence or for residential accommodation; or (b) is intended to be occupied, and is capable of being occupied, as a residence or for residential accommodation; (regardless of the term of the occupation or intended occupation) and includes a floating home.

Goods and Services Tax Ruling 2012/5 Goods and services tax: residential premises (GSTR 2012/5), relevantly explains what is meant by 'residential premises' in the following paragraphs:

6. Premises, comprising land or a building, are residential premises under paragraph (a) of the definition of residential premises in section 195-1 where the premises are occupied as a residence or for residential accommodation, regardless of the term of occupation. The actual use of the premises as a residence or for residential accommodation is relevant to satisfying this limb of the definition.

7. Premises, comprising land or a building, are also residential premises under paragraph (b) of the definition of residential premises if the premises are intended to be occupied, and are capable of being occupied, as a residence or for residential accommodation, regardless of the term of the intended occupation. This limb of the definition refers to premises that are designed, built or modified so as to be suitable to be occupied, and capable of being occupied, as a residence or for residential accommodation. This is demonstrated through the physical characteristics of the premises.

....

Living accommodation provided by shelter and basic living facilities

14. 'Residential premises' are not limited to premises suited to extended or permanent occupation. Residential premises provide 'living accommodation', which does not require any degree of permanence. It includes lodging, sleeping or overnight accommodation.

15. To satisfy the definition of residential premises, premises must provide shelter and basic living facilities. Premises that do not have the physical characteristics to provide these are not residential premises to be used predominantly for residential accommodation.

Further, paragraph 9 of GSTR 2012/5 provides that the requirement in section 40-35 that premises be 'residential premises to be used predominantly for residential accommodation (regardless of the term of occupation)' is to be interpreted as a single test that looks to the physical characteristics of the property to determine the premises' suitability and capability for residential accommodation.

Commercial residential premises

Section 195-1 also contains the definition of 'commercial residential premises'. That term is relevantly defined to mean a hotel, motel, inn, hostel or boarding house (in paragraph (a) of the definition), or anything similar to a hotel, motel, inn, hostel or boarding house (in paragraph (f) of the definition).

While paragraph (f) of the definition of commercial residential premises extends the scope of the definition, its operation is limited to premises that have some or all of the characteristics of both residential premises and one of the classes of premises listed in paragraphs (a) to (e) of the definition (refer to paragraph 143 of Goods and Services Tax Ruling 2012/6 Goods and services tax: commercial residential premises (GSTR 2012/6)).

Paragraphs 9 and 140 of GSTR 2012/6 relevantly provide that the terms in paragraph (a) of the definition of commercial residential premises are not defined within the GST Act and therefore take their ordinary meanings in context. The ordinary meanings of these terms can be found in paragraph 141 of GSTR 2012/6, which provides as follows:

141. The following meanings sourced from the Macquarie Dictionary 5th Edition (Macquarie), the Oxford English Dictionary 2nd and 3rd editions (OED) and the Shorter Oxford English Dictionary 5th Edition (SOED) are relevant in interpreting paragraph (a) of the definition:

Hotel

•         a building in which accommodation and food, and alcoholic drinks are available.

•         building or establishment where travellers or tourists are provided with overnight accommodation, meals and other services.

•         an establishment, esp. of a comfortable or luxurious kind, where paying visitors are provided with accommodation, meals and other services.

Motel

•         a roadside hotel which provides accommodation for travellers in self-contained, serviced units, with parking for their vehicles.

•         a hotel catering primarily for motorists; spec. on comprising self-contained accommodation with adjacent parking space.

Inn

•         a small hotel that provides lodging, food etc., for travellers and others.

•         a public house providing accommodation, refreshments, etc., for payment, esp. for travellers.

•         now also, a public house serving alcoholic liquor for consumption on the premises, whether providing accommodation or not.

Hostel

•         a supervised place of accommodation, usually supplying board and lodging provided at a comparatively low cost, as one for students, nurses, etc.

•         a public house of lodging and entertainment for strangers and travellers; an inn, a hotel.

•         a house of residence for students at a university or on a course, esp. at a non-residential college, or for some other special class of people.

Boarding house

•         a dwelling in which lodging is provided to paying residents who share common facilities such as a kitchen, laundry, living room, etc.

•         a dwelling, usually a private house, in which board and lodging are provided for payment.

•         a house offering board and lodging for paying guests.

In their ordinary meanings, these terms share the common attribute of providing accommodation to guests. Paragraph (f) of the definition of commercial residential premises extends the scope of the definition to premises that are 'similar' to the class of establishments described in paragraphs (a) to (e).

Premises that are 'similar' to establishments that are commercial residential premises must have sufficient characteristics in common with the class of premises described above.

Paragraphs 10 and 11 of GSTR 2012/6 provide that the tests to be applied in determining whether premises fall within either paragraph (a) or (f) of the definition of 'commercial residential premises' necessarily raise questions of fact involving matters of impression and degree which include consideration of the overall physical character of the premises together with how the premises are operated.

Paragraph 12 of GSTR 2012/6 lists the following common characteristics of operating hotels, motels, inns, hostels and boarding houses that are relevant, though not necessarily determinative, to characterising premises as commercial residential premises:

•         Commercial intention

The premises are operated on a commercial basis or in a business-like manner even if they are operated by a non-profit body.

•         Multiple occupancy

The premises have the capacity to provide accommodation to multiple, unrelated guests or residents at once in separate rooms, or in a dormitory.

•         Holding out to the public

The premises offer accommodation to the public or a segment of the public.

•         Accommodation is the main purpose

Providing accommodation is the main purpose of the premises.

•         Central management

The premises have central management to accept reservations, allocate rooms, receive payments and perform or arrange services. This can be provided through facilities on-site or off-site.

•         Management offers accommodation in its own right

The entity operating the premises supplies accommodation in its own right rather than as an agent.

•         Provision of, or arrangement for, services

Management provides guests and residents with some services and facilities or arranges for third parties to provide them.

•         Occupants have the status of guests

Predominantly, the occupants are travellers who have their principal place of residence elsewhere. The occupants do not usually enjoy an exclusive right to occupy any particular part of the premises in the same way as a tenant.

Paragraphs 13 to 24 of GSTR 2012/6 discuss the features of hotels, motels and inns. Some of the comments made in these paragraphs include the following:

Features of hotels, motels and inns

13. A motel is a particular type of hotel that primarily caters to the needs of motorists seeking roadside accommodation. An inn is a small hotel at which board (meals) and lodging are provided to travellers. Subject to those qualifications, the following features of hotels are equally relevant to motels and inns.

14. Hotels provide accommodation for a commercial purpose. Non-profit entities can also operate commercial residential premises. For example, various non-profit organisations operate hotels in a business-like manner.

15. Hotels have the capacity to supply accommodation for multiple occupancies.

16. Hotels usually offer meals to guests and they usually have a kitchen where meals are prepared for guests. The premises usually include a restaurant or dining room for guests. A motel does not necessarily have a dining room, but guests of the motel may still be provided meals.

17. The guest rooms in a hotel are invariably furnished, and always include a bed, and some living area, and usually an adjoining bathroom. In some cases, hotel rooms may also have a kitchenette for self-catering.

18. Linen and towels are usually supplied. The rooms are usually cleaned and serviced by staff on a daily basis, with the costs of these services being included in the tariff.

19. Predominantly, the guests of hotels are travellers who ordinarily have their principal place of residence elsewhere, and who need or desire accommodation while away for business or pleasure. However, this feature may not be evident in hotels, sometimes referred to as residential or private hotels, that provide accommodation to long-term residents for whom the premises are a permanent place of residence.

20. Guests of hotels do not usually enjoy an exclusive right to occupy any particular part of the premises in the same way as a tenant to whom a house or apartment is let. Nor does a guest of a hotel usually let a room for a term. The guest is usually charged at a daily rate multiplied by the number of days of occupancy. However, it is not essential that all guests in a hotel stay for a short period. This feature may not be evident in hotels that provide accommodation to long-term residents.

21. Hotels usually have a reception desk to handle the requirements of both management and guests, particularly when guests check in or check out of the establishment. Hotels may also offer concierge services either at the reception desk or at a separate concierge's desk.

22. Hotels do not normally provide shared accommodation to guests in the sense of having a number of unrelated guests sharing a kitchen and living facilities.

23. A hotel is centrally managed by the operator, typically having at least one person present, or offsite but readily accessible, to manage the accommodation and arrange or provide services.

24. Accommodation in a hotel is supplied by the operator of the hotel in its own right and not in the capacity of agent for a third party. The arrangement between the parties will reveal whether there is an agent-principal relationship.

The features of hostels and boarding houses are discussed in paragraphs 26 to 35 and 36 to 40 of GSTR 2012/6 respectively.

Essentially, the term 'hostel' includes premises that can be described as a hostel, a hotel or inn. The features of hotels and inns identified earlier are also relevant to hostels. Hostels also include supervised places of accommodation usually supplying board and lodging at a comparatively low cost. Hostel accommodation may be provided either in a dormitory environment or in separate bedrooms.

Physical characteristics of hostels may include a commercial kitchen where meals are prepared, a communal area suitable for a dining area for occupants, and a communal laundry; however, the provision of meals is not an essential feature of a hostel. The feature that a hostel, or premises similar to a hostel, be a supervised place of accommodation can be evident where occupants can raise queries and concerns pertaining to the management of the premises with an on-site manager.

A 'boarding house' is a dwelling at which board and lodging are provided to guests or residents. While the term indicates that the premises ordinarily consist of a single dwelling, premises are not precluded from being a boarding house where the premises consists of a building with an additional stand-alone structure in which board (meals), or lodging, or both, is provided.

Paragraph 41 of GSTR 2012/6 provides that ultimately, whether premises are commercial residential premises, is a matter of overall impression involving the weighing up of all relevant factors.

In your case, the Premises associated with the supply of accommodation comprises of a single building designed to be occupied as two separate chalets, more closely resembles that of a hotel, motel or inn.

A hotel, motel or inn is a building or establishment from which accommodation and other services or facilities are supplied. Broadly, accommodation falling into this category would have multiple occupancies such as a block of apartments, central management of the properties, commercial infrastructure such as reception area and provision of services to the guests beyond the accommodation such as breakfast or room servicing.

Paragraph 25 of GSTR 2012/6 states that when determining whether premises are, or are similar to, a hotel, motel or inn, it is necessary to consider the premises in its entirety. It is not sufficient to only consider the features of part of the premises, such as an individual room, in which accommodation is provided.

This position is supported by the following observation made by by Emmett J in the Full Federal Court decision of South Steyne Hotel Pty Ltd v. Federal Commissioner of Taxation FCAFC 155:

A hotel, motel, inn, hostel or boarding house consists of more than the rooms or apartments that are occupied by guests. It must also of necessity include common areas such as reception areas, dining areas, car parks and the like, such as were the subject of the management lot. The supply that consisted only of the rooms or apartments or accommodation units in a hotel complex is not, without those other areas, the supply of commercial residential premises.

Paragraphs 95, 96 and 98 of GSTR 2012/6, which discuss separately titled rooms, apartments, cottages or villas, relevantly provide as follows:

Separately titled rooms, apartments, cottages or villas

95. In addition to living accommodation areas, premises that are commercial residential premises include commercial infrastructure to support the commercial operation of the premises. This infrastructure may include (but is not limited to) reception areas, dining and bar areas, meeting/function areas, kitchens, laundry facilities, storage areas and car parks. This infrastructure is used to provide services to occupants. Premises described in paragraph (a) and similar premises under paragraph (f) of the definition contain some or all of these areas to some degree.

96. Separately titled rooms, apartments, or adjacent cottages or villas located on adjoining or abutting land can be combined with sufficient commercial infrastructure (as discussed in paragraph 95 of this Ruling) so that, as a whole, it can be operated similarly to a hotel, motel, inn, or hostel. Supplies of accommodation in premises operated in this way are supplies of accommodation in commercial residential premises.

98. A supply by sale or lease of real property consisting of part of a building cannot be characterised by reference to another supply. For example, a hotel may be strata titled so that each hotel room and the commercial infrastructure are separate strata units. Where the strata units are individually supplied under multiple sale contracts or leases, each individual supply of a strata unit must be characterised without reference to other supplies of strata units. A supply by sale or lease of strata titled rooms, apartments, cottages or villas without sufficient commercial infrastructure referred to at paragraph 95 of this Ruling is an input taxed supply of residential premises to be used predominantly for residential accommodation regardless of whether the building complex, or any part of it, is being, or will be, operated as commercial residential premises. ...

Regarding separately titled rooms, apartments, cottages or villas, the above paragraphs provide that in addition to living accommodation areas, premises that are commercial residential premises include commercial infrastructure to support the commercial operation of the premises. Such infrastructure is used to provide services to the occupants (guests) and may include (but is not limited to) reception areas, dining and bar areas, meeting/function areas, kitchens, laundry facilities, storage areas and car parks.

An owner of a single apartment or even two apartments in a building complex will not be able to supply accommodation in commercial residential premises if it does not also control and supply the commercial infrastructure. Paragraph 224 of GSTR 2012/6 provides that this characterisation does not change if the owner engages the services of an agent to make the supply of accommodation, regardless of whether the agent has entered into similar agreements with other owners of individual apartments within the apartment complex so as to operate as an on-site agent. Paragraphs 232 to 237 of GSTR 2012/6 provides further guidance on the supply of commercial residential premises and accommodation in commercial residential premises involving agency agreements and strata titled premises.

Where residential accommodation is rented without sufficient commercial infrastructure, such supplies would be input taxed supplies of residential premises to be used predominantly for residential accommodation rather than taxable supplies of commercial residential premises.

Application to this case

Based on information supplied, your Premises, consisting of two chalets, satisfy the definition of residential premises as both provide shelter and basic living facilities: including a bathroom, toilet, laundry, bedroom/s, living area and kitchen.

It remains to be determined whether your Premises also meets the definition of commercial residential premises.

Your Premises, located within the Resort, consist of a single building designed to be occupied as two separate chalets and provide for multiple occupancy. Both chalets are fully furnished, include standard room facilities as listed above and include their own delegated car parking spaces.

The accommodation is advertised to the general public and are operated in a commercial/business-like manner.

The Premises are let out to guests who are temporarily away from their usual homes for the purpose of holiday or short-term accommodation. The Premises are let out through the Resort Manager as your agent.

The chalets are cleaned weekly and/or on departure of a guest by the Resort Manager as part of the Letting service they provide you. Your guests are also able to organise a daily service to refresh rooms for an additional fee by contacting reception which is operated by the Resort Manager.

Your guests have access to other facilities contained within the Resort such as: spa and wellness centre, golf course, two restaurants, gym, sauna, indoor heated swimming pool, activity centre, meeting and conference facilities etc. However, you do not control any of these facilities or services which make up the commercial infrastructure of the accommodation supplied at the Resort. As per the Letting Agreement, Room Revenue which is used to calculate the Owners Return (your return) excludes package items such as, but not limited to, breakfast, spa treatments etc. Consequently, these facilities/services are supplied and controlled by the Resort Manager and/or another third party in their own right as a separate business and are independent to the Letting Agreement and to your supply of accommodation.

Example 12 included at paragraphs 82 to 85 of GSTR 2012/6 illustrates that the supply of accommodation by apartment owner/s, through an agent, is not considered a supply of commercial residential premises. These paragraphs have been duplicated below;

Example 12 - individual holiday apartments

82. Gus owns an apartment in a block of strata titled holiday apartments. Gus's apartment is let out for short-term stays during the year through an on-site manager (who acts as Gus's agent). The on-site manager, who acts as agent in respect to several apartments, provides keys to guests, and cleans the rooms between stays, refreshing items such as linen, towels and the tea and coffee making facilities. The body corporate maintains common areas but does not otherwise involve itself with occupants.

83. The premises are being operated so as to provide accommodation on a commercial basis to travellers (guests) who are temporarily away from their usual homes. The premises are managed by the on-site manager who also provides some services to guests. The manager does not supply the accommodation in their own right, but as agent for Gus.

84. While the accommodation provided through Gus's apartment does display some characteristics of commercial residential premises, the supply of the accommodation through the single apartment is not sufficiently similar to a hotel, motel, inn, hostel or boarding house to be characterised as accommodation provided in commercial residential premises. The fact that the manager acts as agent in respect to several apartments in the block and offers accommodation in that capacity to several parties at once is not sufficient to characterise the supply Gus makes to the guests through the manager as accommodation provided in commercial residential premises.

85. Gus's supply of his apartment by lease, hire or licence is an input taxed supply of residential premises to be used predominantly for residential accommodation under paragraph 40-35(1)(a).

Whilst this example is in regard to an owner of a single apartment, the principle illustrated can also be applicable to an owner of a building designed to be used as two separate chalets as in your case. Similarly, in your case, you provide guests access to accommodation within the Resort through the Resort Manager, who manages your Premises on-site and provides some services to guests. Your Premises also displays some characteristics of commercial residential accommodation as previously discussed but similarly the overall impression of the arrangement, taking into consideration both the physical and operating characteristics of your supply of accommodation of the chalets, is that your supply is not sufficiently similar to a hotel, in a hotel, motel, inn or boarding house or accommodation in similar premise.

This conclusion takes into account the following considerations:

(i)    some of the operating characteristics and commercial infrastructure that would otherwise add weight to characterising your Premises as commercial residential premises are instead provided by, or arranged by, the Resort Manager to guests as part their own business (as set out above), and not as your agent;

(ii)   the physical impression of your Premises within the Resort.

Whilst your Premises are located within zoning that is limited to tourist-oriented development and related uses and has been issued with an occupancy certificate allowing for six-bed tourist and visitor accommodation only, in the absence of sufficient physical and operational characteristics in common with a hotel, motel, inn or boarding house, its zoning is not sufficient to characterise the Premises as commercial residential premises for GST purposes.

Conclusion

As such, your supply of accommodation in your Premises located within the Resort is an input taxed supply of residential premises pursuant to subsection 40-35(1). Consequently, you are not required to pay GST on your supply of accommodation, and you are not entitled to an input tax credit for anything acquired or imported to make the supply of accommodation.

Question 2

Are you required to be registered for GST?

Detailed reasoning

Section 23-5 provides that you are required to be registered if:

a)    you are carrying on an enterprise; and

b)    your GST turnover meets the registration turnover threshold (currently $75,000 or $150,000 for non-profit bodies).

As you are not a non-profit body, the registration turnover threshold that applies to you is $75,000.

Carrying on an enterprise

Section 9-20 relevantly defines enterprise to include an activity, or series of activities, done:

a)    In the form of a business

b)    In the form of an adventure or concern in the nature of trade or

c)    On a regular or continuous basis, in the form of a lease, license or other grant of an interest in property

We consider that you are carrying on an enterprise within the meaning of paragraph 9-20(c).

GST turnover

Subsection 188-10(1), when read together with paragraph 188-10(3)(b), provides that you have a GST turnover that meets the registration turnover threshold if:

a)    your current GST turnover is at or above the registration turnover threshold and the Commissioner is not satisfied that your projected GST turnover is below the registration turnover threshold; or

b)    your projected GST turnover is at or above the registration turnover threshold.

As mentioned above, the registration turnover threshold that applies to you is $75,000.

'Current GST turnover' is defined in subsection 188-15(1) as the sum of the values of all of your supplies made in a particular month and the preceding 11 months other than:

a)    supplies that are input taxed

b)    supplies that are not for consideration

c)    supplies that are not made in connection with an enterprise that you carry on.

'Projected GST turnover' is defined in subsection 188-20(1) as the sum of the values of all of your supplies made in a particular month and the following 11 months other than:

a)    supplies that are input taxed

b)    supplies that are not for consideration

c)    supplies that are not made in connection with an enterprise that you carry on.

As determined above, your supply of accommodation is input taxed and is therefore excluded from both current and projected GST turnover. Consequently, providing you do not make any other taxable supplies you are not required to register for GST.

Question 3

If you are entitled to claim input tax credits for the acquisitions made in supplying the short-term/holiday accommodation located at Premises, can you backdate the start date of your GST registration beyond 4 years?

Detailed reasoning

Not applicable in this case. As your supply of short-term accommodation provided at Premises is an input taxed supply of residential premises pursuant to subsection 40-35(1), you are not required to pay GST on your supply of accommodation, and you are not entitled to an input tax credit for anything acquired or imported to make the supply of accommodation.