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T(65)6259 0880
F(65)6353 3070
1 Goldhill Plaza
#02-47
Podium Block
Singapore 308899
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2. goods and services tax ...
GST is a broad-based tax of 10% on the supply of most goods,
services and anything else consumed in Australia.
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For further information on tax matters in Australia, visit
Australian
Taxation Office .
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» residential property ...
Selling
residential property
GST will apply to:
- the sale of all new residential property, whether
bought by an owner occupier or as an investment;
- selling commissions and other incidental selling costs
such as fees charged by solicitors and surveyors and
advertising costs, irrespective of whether the property is
newly constructed or existing.
Liability for paying GST arises when settlement takes place.
The payment made by the buyer as a deposit on a new
residential property only becomes subject to GST if it is
either forfeited or applied as part consideration for the
purchase (this usually happens when settlement takes place).
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GST will not
apply to the sale of existing residential properties (i.e. on
the sale of an existing family home or when a property is sold
by a private individual), which will be input taxed.
(See
'Input Taxation of Residential Property.)
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Renting residential property
Residential rent is not subject to GST; it is input
taxed. This means the landlord cannot charge GST on rent, and
also cannot claim any input tax credits for GST paid.
The effect of input taxation on these activities is that as
follows:
- Sellers of existing residential property will not
be entitled to claim a credit for GST charged on
incidental expenses associated with the sale of the
property such as solicitor fees, selling agent commissions
and advertising costs.
- Landlords will not be entitled to claim input tax
credits for GST charged to them by suppliers of input
goods and services for their rental property. These inputs
include repairs and maintenance (such as painting,
electrical and plumbing work), the replacement of
appliances (e.g. dishwashers and clothes dryers), property
management fees, advertising, and legal and accountancy
services. Neither will they be entitled to claim input tax
credits for GST paid on the purchase of newly constructed
property.
Liability for paying GST arises when settlement takes place.
The payment made by the buyer as a deposit on a new
residential property only becomes subject to GST if it is
either forfeited or applied as part consideration for the
purchase (this usually happens when settlement takes place).
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» commercial residential
property ...
Commercial residential premises are premises typically used
for short-term accommodation. They include hotels, motels,
inns, hostels, caravan parks, camping grounds and similar
premises, but excludes premises to the extent that they are
used to provide accommodation to students in connection with
an educational institution that is not a school.
The supply of short-term accommodation (that is, for periods
of less than 28 days) in commercial residential premises is
subject to GST.
» incidental selling costs ...
Incidental property selling costs such as fees charged by real
estate agents, solicitors, surveyors, pest and building
inspectors, accountants and financial advisers will be subject
to GST, irrespective of whether the property is residential,
non-residential, newly constructed or existing.
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Concessional GST treatment applies to the provision of
accommodation in commercial residential premises used predominantly
for long-term accommodation (that is, for periods of 28 days
or more).
A business is classified as providing predominantly
long-term accommodation if at least 70% of its customers stay 28
days or more. Businesses that provide predominantly
long-term accommodation can choose to charge GST to customers on
50% of the price for the entire stay, or they can treat the
supply as being input taxed.
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DISCLAIMER
All information provided are to the best of the authors'
knowledge true and accurate. No liability is assumed by the
authors, or publishers, for any losses suffered by any person
relying directly or indirectly upon this information. It is
recommended that clients should consult a senior
representative of a reputable accounting or tax consulting
firm before acting upon this information.
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