TAXATION RULING NO. ST 2134

ST 2134

SALES TAX : COMMUNITY TENANCY SCHEMES

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FOI status:

May be ReleasedFOI number: I 1187265

PREAMBLE

Sub-item 81(1)(c) in the First Schedule to the Sales Tax (Exemptions and Classifications) Act exempts from sales tax goods for use, and not for sale, by a public benevolent institution.

FACTS

2. Community Tenancy Schemes were initiated in 1982 by the New South Wales Government under the administration of the Department of Youth and Community Services. Responsibility for the overall administration of the Schemes now rests with the New South Wales Housing Commission. The Schemes are essentially housing programmes which seek to provide secure, affordable and non-institutionalised rental housing for low income persons. The practical operation of their objects is achieved by subsidising separately constituted community based non-profit organisations involved in the provision of low rental housing to disadvantaged persons.

3. A number of community based schemes have come to the attention of this office. Some of them organise housing/accommodation for persons or families on "low incomes". The "low income" levels have been set at $201 and $365 per week for singles and families respectively but, in fact, the incomes received by those being assisted are much lower. Recipients are usually on unemployment benefits or pensions, the majority consisting of unmarried mothers, parolees, ex-state wards and children from broken homes.

4. In another case, houses are let at subsidised rentals. All but one of the houses have been let to persons in receipt of some kind of government pension, the exception being a house let to a group of unemployed persons. Eligibility is decided by a committee which considers matters such as income, dependants, health etc. Support can be withdrawn at any time by withdrawal of the subsidy.

RULING

6. The tenancy schemes referred to are conducted in a manner where assistance is directed almost exclusively to persons in the community who are regarded as underprivileged. The bodies which conduct the schemes have been accepted as public benevolent institutions.

7. Organizations which conduct similar activities to those described above, will also qualify for exemption from sales tax under item 81(1)(c), First Schedule, provided that in their constituent documents and in practice they are established and maintained exclusively or principally in providing low rental housing to underpriviliged persons.

COMMISSIONER OF TAXATION
4 July 1985

References

ATO references:
NO 83/13054-7

Date original memo issued:
6 May 1985

Subject References:
PUBLIC BENEVOLENT INSTITUTIONS
COMMUNITY TENANCY SCHEMES

Legislative References:
SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) ACT ITEM 81 FIRST SCHEDULE