Private ruling: GST - commercial accommodation
Date of advice: 15 December 2025
Published: 2 February 2026
Ruling period: *date* to *date*
Date scheme commenced: *date*

Ruling: Q1: Is the supply of short stay accommodation in the dwellings situated at **address** 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)? | A1: Yes

Relevant facts and circumstances: You are a partnership registered for GST from *date*. The partners are Partner 1 and Partner 2. You operate a business providing short stay accommodation at **address**. The property was purchased by Partner 1 on *date* as an operational short term accommodation business. Following a short period to move in and clean up the property, you began your short-term accommodation operations on *date* . There have been no improvements to the property since its purchase. The property has a business insurance policy for 'holiday cabins' with an indemnity limit of $. The property comprises four accommodation dwellings plus multiple sheds and outbuildings. The accommodation buildings consist of: • Dwelling 1 o Currently used as the manager's residence - X bedrooms, X bathrooms, laundry o Reception area with desk and seating area • Dwelling 2 o X bedrooms, X bathrooms, kitchen, combined living, laundry, rumpus/games room o Internet access, DVD player, free in-house movies, ceiling fans, dishwasher o Sleeping capacity of X people. • Dwelling 3 o X bedroom, combined living/dining/kitchen, laundry, entertainment deck o Sleeping capacity of X people • Dwelling 4 o One large area with a bed and kitchenette, camping stove and a private jetty over a dam o Sleeping capacity of X people Each dwelling that is available for accommodation is fully furnished and the amenities provided for each stay include: • Bathroom - shampoo, conditioner, soaps, toilet paper, tissues, laundry powder • Kitchen - tea, coffee, sugar, milk, oil, glad wrap, foil, salt and pepper • Fresh towels and linen • Local paper and magazine All accommodation buildings are air-conditioned and have a television. Wi-fi is available throughout the property. A communal BBQ and games room is provided for guests. There is also an outdoor gym plus multiple outdoor areas for guests to use for entertaining/camping/hosting events, plus two dams. Parking is provided at an area inside the perimeter of the property - no provision next to the dwellings. The garage and Dwelling 1 are presently used for the storage of linen, cleaning products and equipment, maintenance tools as well as laundering linen. You do not provide food services, and meals are not provided to guests. The dwellings are cleaned after each stay. With one exception, no additional fees are charged for cleaning. Additional supplies of fresh towels and linen are provided, if required, during the stay, at no additional cost. Guests may go to reception or contact Partner 2 on the mobile phone number should they require assistance in relation to the dwellings. You do not engage other parties in relation to the provision of the accommodation activities - you handle the cleaning, property maintenance etc, laundry, ordering and shopping for supplies, guest liaison, bookings and payments as well as Xero bookwork yourselves. You advertise the accommodation on your own website, as well as a number of platforms. You pay a X% or 1X% commission to the majority of these platforms. You use a hotel management system to manage your daily operations which allows you to be linked to your booking platforms. Bookings, room allocation, payments and provision of services are arranged and managed through this platform. Bookings and rates: • Dwelling 2 - ranges from $X to $X per night (depending on the advertising platform and season). • Dwelling 3 - ranges from $X to $X per night (depending on the advertising platform and season). • Dwelling 4 - ranges from $X to $X per night (depending on the advertising platform and season). • Check-in times X to X. • Check-out times X to X. • While minimum stays are generally X nights, you may change this, closer to the date, to X night to fill empty dwellings. The accommodation in all dwellings is offered to the public all year round except when you close for a personal holiday or any dwelling renovations are required. • Payment is by EFTPOS or credit card. • If a visit is cut short, the visitor will not get a refund. • No deposits are required for the stays unless the whole property is booked for exclusive use, in which case the guest is required to pay a X% deposit when booking. Credit card details are recorded for a security bond on the hotel management system. No charge is applied to the credit card unless there are damages. • Guests are provided with check in/check out times, payment policy and terms and conditions when booking. • Once a booking is confirmed, confirmation is provided to guests by email, with detailed instructions on how to access the property and directions to reception. Upon arrival, they are welcomed at reception, where Partner 2 personally escorts them to the dwelling and provides a brief overview of the accommodation and property features. When guests leave, they can come to reception and drop off the key, if they leave outside of hours, there is an early drop off box for the key located outside the reception office. Currently, Partner 1 works full-time and Partner 2 operates a business although this has been impacted due to their involvement in the accommodation operation. Your goal is to grow the business and eventually be in a position where you can rely on it as your primary source of income. You have approval from the Council to build a new house which will become your place of permanent residence, estimated to be completed in MTH YYYY. At that time, you will no longer be allowed to use Dwelling 1 as a permanent place of residence. Dwelling 1 will be rented out as short term accommodation under the same terms as the other three dwellings, and the new principal place of residence will be the management and reception facility. You have requested that this ruling incorporates the future arrangement, You have treated the supplies of the accommodation as GST taxable supplies since you began operating the business.


Reasons for decision: Summary: 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 reference materials cited are available on the ATO website www.ato.gov.au Section 9-5 provides that you make a taxable supply if: (a) you make the supply for consideration; and (b) the supply is made in the course or furtherance of an enterprise that you carry on; and (c) the supply is connected with indirect tax zone; and (d) you are 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. Your supply of the accommodation in the dwellings satisfies the requirements under section 9-5 because of the following: • the supply is for monetary consideration • you make the supply in the course of your accommodation enterprise that you carry on • the property is located in Australia, hence, supply of the accommodation in the dwellings at the property is connected with the indirect tax zone and • you are registered for GST. Division 38 and 40 provide for certain supplies to be GST-free and input taxed respectively. In your circumstances, the supply of the accommodation in the dwellings is not GST-free. Therefore, it remains to be determined if, by supplying accommodation in the dwellings, you are making input taxed supplies. Residential premises Section 40-35 provides that a supply of residential premises by way of lease, hire or licence (other than a supply of commercial residential premises or a supply of accommodation in commercial residential premises provided to an individual by an entity that owns or controls the commercial residential premises) is input taxed. The term 'residential premises' is defined in section 195-1 to mean 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 occupation or intended occupation) and includes a floating home. The Commissioner's view on whether premises are considered residential premises is provided in Goods and Services Tax Ruling GSTR 2012/5 Goods and services tax: residential premises (GSTR 2012/5). To satisfy the definition of residential premises, premises must provide shelter and basic living facilities. The premises must be fit for human habitation in order to be suitable for, and capable of, being occupied as a residence or for residential accommodation. In your case the dwellings satisfy the definition of 'residential premises' as the premises provide shelter and basic living facilities as explained at paragraph 9 GSTR 2012/5. The primary issue in this case is whether your supplies fall within the exclusions in paragraph 40-35(1)(a), being a supply of commercial residential premises or a supply to an individual of accommodation in commercial residential premises that you own or control. If this is the case, the supply is taxable. Commercial residential premises Commercial residential premises are defined in section 195-1 to include, amongst other things: (a) a hotel, motel, inn, hostel or boarding house; or ... (f) anything similar to residential premises described in paragraphs (a) to (e). However, it does not include premises to the extent that they are used to provide accommodation to students in connection with an education institution that is not a school. The definition of 'commercial residential premises' encompasses similar establishments or establishments that exhibit characteristics that place them on a similar footing to hotels, motels, inns, hostels and boarding houses. Goods and Services Tax Ruling GSTR 2012/6 Goods and services tax: commercial residential premises (GSTR 2012/6) provides the ATO view of the definition of commercial residential premises. The terms hotel, motel, inn, hostel and boarding house are not defined in the GST Act and take their ordinary meaning. The Macquarie Dictionary 5 th Edition provides the following definitions: Hotel a building in which accommodation and food, and alcoholic drinks are available Motel a roadside hotel which provides accommodation for travellers in self-contained, serviced units, with parking for their vehicles. Inn a small hotel that provides lodging, food etc., for travellers and others Hostel a supervised place of accommodation, usually supplying board and lodging provided at a comparatively low cost, as one for students, nurses, etc. Boarding house a dwelling in which lodging is provided to paying residents who share common facilities such as a kitchen, laundry, living room, etc. 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 one of 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 one of the class of premises described. 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. In addition to the physical characteristics of the premises, paragraph 12 of GSTR 2012/6 lists the following eight characteristics that are considered to be common to operating hotels, motels, inns, hostels and boarding houses: • commercial intention • multiple occupancy • holding out to the public • accommodation is the main purpose • central management • management offers accommodation in its own right • provision of, or arrangement for, services, and • occupants have the status of guests. 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. Paragraph 41 of GSTR 2012/6 states that ultimately, determining whether premises are commercial residential premises is a matter of overall impression involving the weighing up of all relevant factors. Paragraphs 53 to 55 of GSTR 2012/6 provides an example of commercial residential premises that reflect similar circumstances to yours: Example 4 - farm stays 53. Delta Farm Holidays is a farm stay business conducted in association with an adjacent alpaca farm. An on-site manager advertises the farm stays in national lifestyle magazines as 'eco-friendly' holidays. 54. Accommodation is offered as bed and breakfast, and suites are cleaned daily. Guests are invited to participate in the workings of the farm and stay in renovated farm buildings that sleep up to twelve guests in four separate suites. 55. 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 provide accommodation to multiple occupants. The guests do not have an exclusive right to occupy any particular part of the premises during their stay. The on-site manager provides central management and services to guests. The accommodation is supplied by Delta Farm Holidays in its own right. Delta Farm Holidays' premises are sufficiently similar to a hotel, inn or boarding house to be characterised as commercial residential premises. The supplies of the farm stays are taxable supplies of accommodation in commercial residential premises. | Detailed Reasoning - Application to this case: In your case the dwellings share the following physical characteristics and manner in which they are operated in common with hotels, motels, inns, hostels and boarding houses: • Your activities are conducted for a commercial purpose given the business-like manner you operate the accommodation business. • The property has a number of dwellings, enabling you to provide accommodation to a number of unrelated guests at once in separate units. • The dwellings are advertised to the public on a number of websites and offered on a daily rate basis. • The main purpose of the dwellings is to provide accommodation - each dwelling is fully self-contained with kitchen and dining facilities - although you do not provide meals. • You provide central management for each dwelling - you operate a reception, organise maintenance and cleaning for the property and are available to handle after hour requests. • You supply the accommodation in your own right. • You provide a reception with facilities to accept reservations and receive payments, you provide linen and towels to your guests and organise the maintenance and cleaning for the property. • The accommodation is available to travellers or holiday makers who ordinarily have their principal place of residence elsewhere - occupants have the status of guests. | Detailed Reasoning - Conclusion: Based on the information provided, we consider that, on balance, the accommodation at *address* is operated in a way similar to a motel as it displays sufficient features to be characterised as being similar to a motel under paragraph (f) of the definition of commercial residential premises. The supplies of accommodation at the property are supplies of accommodation in commercial residential premises and therefore not input taxed under section 40-35 of the GST Act. As such, they are taxable supplies under section 9-5. Once the new residence is occupied as your principal place of residence and utilised for the management and reception services, the accommodation provided at Dwelling 1 will be taxable supplies of accommodation in commercial residential premises, providing that the accommodation is offered under the same terms as the other premises.