Private ruling: GST - supply of commercial residential premises
Date of advice: 10 October 2025
Published: 24 November 2025
Ruling period: XX XXX XXXX to XX XXX XXXX
Date scheme commenced: XX XXX XX

Ruling: Q1: Was the assignment of the Lease an input taxed supply under subsection 40-70(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No, the assignment of the Lease was not an input taxed supply under subsection 40-70(1) of the GST Act. Your supply of the leasehold interest in the Property was a taxable supply pursuant to section 9-5 of the GST Act. | Q2: Was your supply of the Assets, as listed in Annexure X to the Contract of Sale dated XX XXX XXXX, a taxable supply under section 9-5 of the GST Act? | A2: Yes, your supply of the Assets, as listed in Annexure X to the Contract of Sale dated XX XXX XXXX, was a taxable supply under section 9-5 of the GST Act. However, if the defibrillator you supplied can both monitor and restart a patient's heartbeat, its supply may be GST-free, provided you and the recipient have not agreed that it should be treated as taxable.

Relevant facts and circumstances: You, A Co, registered with ASIC on XX XXX XXXX as a public company limited by shares. You have been registered for GST since XX XXX XXXX and report your GST. You operate a X scheme. Your Constitution outlines the rules governing the management and operation of the X operation. The Lease You executed a head lease agreement to lease a property on Registered Plan X (the Property) from the Proprietor/Lessor - XXX (original Proprietor/Lessor) for use in your title-based X scheme operation known as the X. The lease was executed on XX XXX XXXX (registered lease XX). A copy of the lease agreement was provided, and its terms were considered. Under your 'Constitution', the holder of a fractional interest in the Property is referred to as being a 'Co-Owner' of the Property and the holder of your share capital is referred to as a 'Member'. You issued X shares and the Property is divided into X tenant-in-common interests. As a consequence of the original Proprietor's transfer of an interest in the Property to the Co-Owners, the Lease was automatically assigned to the Co-Owners by the operation of the law. Prior to the Court Order detailed below, there were X separate Members/Co-Owners. The proprietors/lessors of the Property were the Co-Owners comprising of X entities (Proprietor/Lessor). There were X Members. In XXX XXXX, the Members resolved to wind up the X scheme and sell the Property. The Court Orders On XX XXX XXXX the Supreme Court issued an Order (Number XX). A copy of the court order was provided, and its terms were considered. On XX XXX XXXX the Trustees submitted a request to the Titles Registry to amalgamate the shares in the Property to create a single indefeasible title for the Property (dealing XX) and to vest the Property in the name of XX as statutory trustees for sale (dealing XX). The Property Your Constitution refers to the Property as a 'Resort'. The Property consists of a circa XXXX X-storey building comprising of X units, a reception area in addition to a single level of basement car parking. The Property is located on a rectangular shaped lot with total land area of XXm2. All X units in the Property are fully self-contained comprising of X-bedrooms, X-bathroom. The gross floor areas of the units range from X sqm to X sqm. Each unit is fully furnished including white goods, furniture, electrical items and kitchen appliances. Each unit is equipped as follows: • Kitchen: Updated kitchen with X. • Bathroom: Updated bathroom with X. • Laundry: X. • Miscellaneous: X. Each unit has exclusive use of a single basement car space, with X additional basement visitor spaces available. Communal facilities include a list supplied. The Property has a pylon sign located in its front yard. The Property is classified within the X. In XXXX, the Council approved the Property under building application number X as a multi-unit dwelling. Photographs and the floor plans of the Property were considered. Use of the Property Consistent with the operation of a X scheme, accommodation at the Property was predominantly provided to X Members and Co-Owners (or their guests, including an incoming guest generated by an exchange company who the member and/or co-owner chose to swap their usage rights with). Under your Constitution, Members or Co-owners were entitled to accommodation in an unspecified unit and use of the common facilities at the Property. Members/Co-Owners of the X scheme were responsible for booking their annual X allocation at the Property. All bookings by Members and/or Co-Owners or their guests were for a duration of X nights. Members were liable to annual outgoings referred to as 'Entitlement Costs' and/or levies and were not able to exercise their rights or privileges of membership whilst their overdue Entitlement Costs and/or levies remained unpaid. On this limited basis (where the X members were delinquent in their levy payments or had not otherwise used all available annual X allocations) the accommodation at the Property was made available to the public for holiday-rentals via wholesaler rental sites, including X websites, or through guest rentals sourced from XXX (a corporate management company) internal business. The occasional holiday rental guests were charged a fee that was applied as rental revenue in your financials and contributed to the operating costs of the overall X scheme activities. You employed onsite staff and engaged any required contractors, including X, to assist with the X scheme obligations and the reporting. An onsite manager was engaged on a part-time and on-call basis to provide guests with reception services including tour and transport bookings via wholesalers. Reception services were available X days per week. The onsite manager resided in one of the X units at the Property. The operation of the X scheme ceased in XXX XXXX to allow for the sale of the Property. In anticipation of the sale of the Property, the Property was used solely for ad-hoc holiday rentals available to the public from XX XXX XXXX to XX XXX XXXX. During this period X obtained bookings for X night stays at the Property via promotion to its internal customer database. There was no change to the day-to-day operation and management process at the Property from XX XXX XXXX onwards, other than the source of the bookings. The limited holiday letting carried out between XX XXX XXXX was carried out to cover a small portion of the ongoing costs associated with the X scheme (such as property maintenance costs for which you remained responsible until a sale of the Property occurred). The fees paid by guests were applied as rental revenue in your financials and off-set against such expenses. You did not make a profit from the ad-hoc holiday rentals and the Property continued to run at a loss during this time. GST was included in the charges/fees for accommodation at the Property whenever the accommodation was made available to the public (holiday rentals). While the Property was operated by you, the pylon sign located in its front yard displayed your advertisement. This sign was painted over just after settlement of the contract of sale took place. Development application To assist with the promotion and sale of the Property and maximise the return for the X participants, you obtained a residential development approval prior to the sale of the Property. On XX XXX XXXX, the Council issued a Decision Notice for a Development Permit for a Material Change of Use (Impact Assessment) for Multiple Dwellings and Short-Term Accommodation X Units). The approved scheme is for a X-level high-rise building featuring X levels of basement, X podium level and ground floor car parking, X two-bedroom, X bathroom apartments, X X-bedroom, X-bathroom apartments and X X-bedroom, X-bathroom penthouse apartment. This existing approval cannot be activated unless vacant possession can be secured. The approval has a currency period of X years, lapsing circa XXX XXXX. Whilst you obtained development approval, no renovations, alterations, improvements, or demolition of any part of the Property occurred prior to its sale and settlement. Additionally, you did not undertake substantial renovations to the Property since you were granted the Lease in XXXX. Contract of Sale On XX XXX XXXX, in respect of the Property, vendor XX as statutory trustees for the sale under instrument X, and in respect of the Assets, vendor X entered into a single Contract for Commercial Land and Buildings with purchaser XX for $X (inclusive of GST) (the Contract of Sale). The Contract of Sale provides the Property was supplied on a freehold basis. The Contract of Sale lists the 'Present Use' of the Property as 'Commercial resort complex and ancillary commercial infrastructure'. The Contract of Sale is subject to special conditions included in Annexure <number>. A copy of the Contract of Sale was provided, and its terms were considered. Annexure XX of the Contract of Sale listed the Assets. All of the 'Assets' consisting of plant, equipment, furniture, appliances, other household items and a defibrillator situated at the Property were used in providing accommodation at the Property under the operation of the X scheme and/or in an ad hoc basis in providing accommodation to the general public. As the X scheme was being wound up, and prior to settlement the buyer had made arrangements to secure residential long-term tenants for the Property, all of the furniture and chattels were sold with the building. Settlement took place on XX XXX XXXX Assignment of the leasehold interest in the Property Additionally, on XX XXX XXXX, you as transferor and X as transferee executed a transfer of your leasehold interest in the Property (lease X) - an agreement operating in conjunction with the Contract of Sale. Whilst clause X of the Lease prevents the assignment of the Lease, by mutual verbal agreement between the Trustees (as Lessor) and you (as Lessee), this clause was overridden. It was agreed the assignment of the lease would allow the sale proceeds under the Contract of Sale to be apportioned between the owners of the freehold and leasehold interests in the Property in accordance with the valuation obtained by the Trustees as detailed below. At the time of the transfer of the lease there remained approximately X years of the total X year lease term. Valuation commissioned by the Trustees On XX XXX XXXX, the statutory trustees commissioned X (the Valuers) to provide an apportionment of the sale price ($X including GST) of the Property as at XX XXX XXXX between: • Freehold Interest; • Leasehold Interest; and • Chattels. (the Valuation). The valuers apportioned the sale price (excluding GST) as follows: • $X (excluding GST) for the Lease; • $X (excluding GST) for the freehold interest in the Property; and • $X (excluding GST) for the Assets. The value attributed to the Assets are based on a report dated XX XXX XXXX prepared by X that was provided to the Valuers.

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 9-40 | A New Tax System (Goods and Services Tax) Act 1999 section 38-45 | A New Tax System (Goods and Services Tax) Act 1999 section 40-70 | A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision: Summary: No, the assignment of the Lease was not an input taxed supply under subsection 40-70(1) of the GST Act. Your supply of the leasehold interest in the Property was a taxable supply pursuant to section 9-5 of the GST Act. | Detailed Reasoning - Detailed reasoning: Subdivision 40-C of the GST Act deals with sales of residential premises and supplies of residential premises by way of long-term lease. Subsection 40-70(1) of the GST Act states that a supply of residential premises by way of a long-term lease is input taxed if: (a) the supply is of real property [1] but only to the extent that the property is residential premises to be used predominantly for residential accommodation (regardless of the term of occupation); and (b) the supply is by way of long-term lease. Subsection 40-70(2) states that the supply is not input taxed to the extent that the residential premises are: (a) commercial residential premises; or (b) new residential premises other than those used for residential accommodation (regardless of the term of occupation) before 2 December 1998. The policy intent in relation to section 40-70 is set out in the Explanatory Memorandum to the A New Tax System (Goods and Services Tax) Bill 1998 which states: 5.166 The supply of a long term lease (that is, a lease of 50 years or more) is not a supply of residential rent. The supply of a long term lease is to be treated as a sale of residential premises and input taxed under Subdivision 40-C. Subsection 40-35(2) and section 40-70 . In this case it is necessary to determine whether or not you supplied residential premises by way of long-term lease, and/or whether you supplied commercial residential premises. | Detailed Reasoning - Long-term lease: Section 195-1 defines long-term lease as a supply by way of lease, hire or license (including a renewal or extension of a lease, hire or license) for at least 50 years if: a) at the time of the lease, hire or licence, or the renewal or extension of the lease, hire or licence, it was reasonable to expect that it would continue for at least 50 years; and b) unless the supplier is an Australian government agency - the terms of the lease, hire or licence, or the renewal or extension of the lease, hire or licence, as they apply to the recipient are substantially the same as those under which the supplier held the premises. Issue 6.3.4 of the Primary Production Industry Partnership GST Issues Register considers the assignment of a long-term lease partway through its original term and provides: When a lease is first granted, the period of time necessary to meet the requirements of the definition of long-term lease must be at least 50 years. The nature of an assignment is determined by the nature of the interest being assigned rather than the time remaining of the original grant. Therefore, the assignment of a lease that was originally granted for at least 50 years will remain a long-term lease. In an agreement which operated in conjunction with the Contract of Sale you transferred your leasehold interest in the Property to X on XX XXX XXXX based on the original terms of the Lease. The original term of the lease was for a period of X years, terminating on XX XXX XXXX. Therefore, the assignment of the Lease that was originally granted for X years will remain a long-term lease. | Detailed Reasoning - Residential Premises: Section 195-1 defines 'residential premises' 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; a. (regardless of the term of the occupation or intended occupation) and includes a floating home. Goods and Services Tax Ruling GSTR 2012/5 Goods and services tax: residential premises (GSTR 2012/5) provides guidance in determining whether particular premises are residential premises. Paragraph 9 of GSTR 2012/5 explains that the requirement that the residential premises are to be used predominately for residential accommodation (regardless of the term of occupation) in sections 40-35, 40-65 and 40-70 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. Paragraph 15 of GSTR 2012/5 continues by explaining that to satisfy the definition of residential premises, premises must provide shelter and basic living facilities. These characteristics will be inherent in the design and fabrication of the premises and typically include areas for sleeping, eating and bathing. However, premises may provide shelter and basic facilities without necessarily having a conventional bedroom or bathroom. Paragraph 20 of GSTR 2012/5 provides that the premises must also be fit for human habitation in order to be suitable for, and capable of, being occupied as a residence or for residential accommodation. The buyers intended use of the premises is not a relevant factor in determining the character of the premises as illustrated in example 1 in GSTR 2012/5. Based on information supplied, the Property provides shelter and basic living facilities including bathroom/s, toilet, bedroom/s, living area and kitchen, thus displaying the physical characteristics suitable and capable of providing residential accommodation. Accordingly, the Property satisfies the definition of residential premises. Therefore, it remains to be determined whether the Property also meets the definition of commercial residential premises. | Detailed Reasoning - Commercial residential premises: Under section 195-1, the term 'commercial residential premises' means: (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 establishments similar to, or establishments that exhibit characteristics that place them on a similar footing to, hotels, motels, inns, hostels and boarding houses. The ATO's view on the meaning of commercial residential premises is set out in Goods and Services Tax Ruling GSTR 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: 18 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). Paragraph 145 of GSTR 2012/6 provides that premises that fall within paragraph (f) may be described as something other than those premises listed in (a) to (e), for example, a 'resort' or 'serviced apartments'. These premises are commercial residential premises if they are used in a particular way. 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. 3 • 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. | Detailed Reasoning - Hotels, motels and inns: 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. | Detailed Reasoning - Hostels: The features of hostels are discussed in paragraphs 26 to 35 and 169 to 180 of GSTR 2012/6. In relation to hostels, we consider the relevant ordinary meaning is a supervised place of accommodation usually supplying board and lodging provided at comparatively low cost. In terms of physical and design characteristics, hostels are designed to supply accommodation at a comparatively low cost to the occupants. Physical characteristics may include: • a commercial kitchen where meals are prepared • a communal area suitable for a dining area for occupants, and • a communal laundry. In relation to operating characteristics, in addition to the common factors that apply to commercial residential premises, paragraphs 29 to 35 of GSTR 2012/6 provide the following characteristics, specific to hostels: • they are typically centrally managed by an on-site manager who manages the accommodation and arranges or provides services - that is, it is a supervised place of accommodation - occupants can raise queries and concerns pertaining to the management of the premises with an on-site manager, • accommodation may be provided either in a dormitory environment or in separate bedrooms, • accommodation in the premises may be supplied as the occupant's principal place of residence, • provision of meals by the operator of the premises; however, this is not an essential feature of a hostel. | Detailed Reasoning - Boarding Houses: The features of boarding houses are discussed in paragraphs 36 to 40 and 181 to 186 of GSTR 2012/6. In addition to the other operating characteristics applying to commercial residential premises, specific characteristics of boarding houses to include: • provision of board (meals) and lodging • must not be premises where a central building is used as a communal dining/meeting area with a number of independent living units (that is, a retirement village is not a boarding house) • may provide accommodation as the occupant's principal place of residence. Paragraphs 95 of GSTR 2012/6, provides that in addition to providing 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. Where residential premises is supplied 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. | Detailed Reasoning - Features that indicate premises that are not a hotel, motel, inn, hostel, boarding house or similar premises: Paragraph 41 of GSTR 2012/6 identifies a number of factors that may indicate that premises are not a hotel, motel, inn, hostel, boarding house or similar premises. These include: • the operator and occupant agree for accommodation to be supplied for a periodic term (which may be for a period of months or years at a time), such as in a residential lease; • the operator and occupant document the condition of the premises under a written contract before the accommodation is initially supplied and when the occupant ceases to occupy premises; • the operator has the right to impose a cleaning fee on the occupant when the occupant ceases to occupy the premises; • the occupant is permitted, subject to the terms of the lease or licence, to alter the part of the premises occupied by the occupant, such as by attaching hanging devices on a wall; • the occupant is permitted, subject to the terms of the lease or licence, to keep pets in the premises; • the occupant must separately arrange and pay for the connection of a telephone, electricity, or gas service; • the occupant is responsible for the cleaning and minor maintenance of the premises, such as changing light bulbs in their room; • the premises are unfurnished; and • the right to occupy the residential premises is supplied to the occupant in exchange for the occupant loaning an amount to the operator together with other fees. See Example 1 at paragraph 43 of this Ruling. The presence or absence of these features together or individually does not of itself determine the characterisation but are factors relevant to determining the overall impression of the arrangement. 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 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. | Detailed Reasoning - Application to your case: In your case, while the Property is described as a 'resort' under your Constitution, and not specifically as one of the types of premises listed in paragraphs (a) to (e) of the definition of commercial residential premises, it shares the following physical characteristics and manner in which it was operated prior to its sale in common with hotels, motels, inns and boarding houses: • The Property was operated by you on a commercial basis and in a business-like manner. • While the X operation had ceased by the settlement date, the property's physical characteristics and its architectural plans demonstrate that the Property was suitably designed and constructed to support the X operation. • The Property has the capacity to provide accommodation to multiple occupants at once in separate units. • Each unit was self-contained and fully furnished. • The Property provides commercial infrastructure such as a reception/lobby with a staff kitchen and bathroom, games room, sauna, male and female amenities, bicycle and linen storage, inground swimming pool and spa with paved surrounds, gymnasium and underground carparking to support the commercial operation of the Property. • The Property was centrally managed by you. You engaged an onsite manager on a part-time and on-call basis to provide guests reception services and arrange other services such as tour and transport bookings X days per week. You also engaged any required contractors, including X, to assist with the X scheme obligations and the reporting. • The accommodation at the Property was made available to a segment of the public, being the X participants and/or their guest. Accommodation at the Property was also made available to the general public when X participants were delinquent in paying their levies, did not fully use their annual X entitlements, and between the period XXX to XXX XXXX after the X operation ceased, and the Property was advertised for sale. • The Property was used in your X operation which entitled X participants to accommodation at the Property - accommodation being the main purpose of the Property. • Occupants had the status of guests - that is, travellers who have their principal place of residence elsewhere. In addition, the occupants did not have exclusive rights to occupy the Property in a manner that is similar under a normal tenancy agreement. • Supervised accommodation was provided to occupants in the sense that occupants had access to and were able to raise their concerns about the management or operation of the premises with the part-time onsite manager. However, the Property does not have the following characteristics in common with hotels, motels, inns, hostels and boarding houses: • the Property does not contain a restaurant or commercial kitchen and communal dining area • guests were not provided with room service or meals. As stated above, determining whether premises are commercial residential premises is a matter of overall impression and degree involving weighing up all relevant factors. Premises described differently, such as a 'resort', may still fall under paragraph (f) if used in a similar way to those listed in paragraphs (a) to (e). Based on the facts of this case, the Property displays some physical characteristics of commercial residential premises and contains infrastructure that allowed it to be operated by you in a similar manner to a hotel, motel, inn, hostel or boarding house. Consequently, the Property is characterised as commercial residential premises under paragraph (f) of the definition in section 195-1. Therefore, your supply was not an input taxed supply of residential premises by way of a long-term lease under subsection 40-70(1) of the GST Act. Your supply of the leasehold interest in the Property will be a taxable supply where you satisfy the requirements of section 9-5, which provides: 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 the indirect tax zone; and d) you are registered, or required to be registered However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. Division 38 and 40 provide for certain supplies to be GST-free and input taxed respectively. We consider that neither of these Divisions have application to your supply. You are registered for GST, and your supply satisfies all of the other elements of section 9-5 of the GST Act, as your supply was for consideration, made in the course or furtherance of your enterprise (which includes the termination), and the supply was connected with the indirect tax zone, as the Property that is the subject of the Lease is located in Australia. Therefore, your supply of the leasehold interest in the Property was a taxable supply pursuant to section 9-5 of the GST Act. | Detailed Reasoning - Question 2: Was your supply of the Assets, as listed in Annexure X to the Contract of Sale dated XX XXX XXXX a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | Summary: Yes, your supply of the Assets, as listed in Annexure X to the Contract of Sale dated XX XXX XXXX, was a taxable supply under section 9-5 of the GST Act. However, if the defibrillator you supplied can both monitor and restart a patient's heartbeat, its supply may be GST-free, provided you and the recipient have not agreed that it should be treated as taxable. | Detailed Reasoning - Detailed reasoning: Section 9-40 provides that you are liable for GST on any taxable supplies that you make. You will make a taxable supply where you satisfy the requirements of section 9-5 as listed above. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. Divisions 38 and 40 provide for certain supplies to be GST-free and input-taxed respectively. Your supply of the Assets contains separately identifiable supplies of furniture, appliances, equipment and other items such as a defibrillator. Paragraph 16 of Goods and Services Tax Ruling GSTR 2001/8 Goods and services tax: Apportioning the consideration for a supply that includes taxable and non-taxable parts (GSTR 2001/8) discusses mixed supplies. It states: 16. In this Ruling the term 'mixed supply' is used to describe a supply that has to be separated or unbundled as it contains separately identifiable taxable and non-taxable parts that need to be individually recognised. Paragraphs 11 and 12 of GSTR 2001/8 provide: 11. Where you make a supply that is identifiable as having more than one part and each part is taxable, you do not need to apportion the consideration for the supply. This is because GST is payable on the whole supply. Similarly, if all of the parts of a supply are identifiable as being non-taxable, GST is not payable on any part of the supply. 12. However, where you make a supply that is a combination of separately identifiable taxable and non-taxable parts, you need to identify the taxable part of the supply. Then you can apportion the consideration for the supply and work out the GST payable on the taxable part of the supply. In your case, you are registered for GST, and your supply of the Assets which were used in your X operation satisfies all the positive limbs of section 9-5 of the GST Act. Furthermore, your supply of the Assets is not input taxed under Division 40 of the GST Act. It remains to be determined if the supply of any of the separately identifiable Assets are GST-free pursuant to the provisions in Division 38. | Detailed Reasoning - Defibrillator: At least one of the Assets you are supplying consists of a medical aid or appliance - the defibrillator. A defibrillator checks the heartbeat, provides audio guidance on how to do the electroshock to the heart to resuscitate the patient and continues monitoring the heartbeat until ambulance arrives or the person arrives at a hospital. Portable defibrillators that are commonly found in public spaces are known as an AED meaning Automatic External Defibrillator. An AED is a portable unit which operates in an automated way such that it can be used by persons without substantial medical training who are responding to a cardiac emergency. The device is used to correct a dangerously abnormal heart rhythm, usually ventricular fibrillation, or to restart the heart by depolarising its electrical conduction system and delivering brief measured electrical shocks to the chest wall or the heart muscle itself through contacts fixed externally to the chest. The AED unit uses a biphasic self-compensating output pulse envelope waveform. This is produced from electricity sourced from a battery within the unit. The unit is controlled by a purpose designed electronic program. A visual display provides guidance and an audio output gives instruction during the use of the unit. Section 38-45 of the GST Act states: (1) A supply is GST-free if: (a) it is covered by Schedule 3 (medical aids and appliances), or specified in the regulations; and (b) the thing supplied is specifically designed for people with an illness or disability, and is not widely used by people without an illness or disability. (2) A supply is GST-free if the thing supplied is supplied as a spare part for, and is specifically designed as a spare part for, another thing the supply of which would be GST-free under subsection (1). (3) However, a supply is not GST-free under subsection (1) or (2) if the supplier and the recipient have agreed that the supply, or supplies of a kind that include that supply, not be treated as GST-free supplies. Item 1 in the table in Schedule 3 to the GST Act (Item 1) lists heart monitors. A heart monitor is a device with a primary function of monitoring a patient's heartbeat. It is considered that Item 1 covers AEDs that are used to both monitor a patient's heartbeat and when necessary, are used to start the patient's heartbeat again. Item 1 does not cover those defibrillators that can only be used to start a patient's heart beating or those that can only be used for diagnostic purposes. If the defibrillator you supplied can both monitor and restart a patient's heartbeat, the supply may be GST-free, provided you and the recipient have not agreed that it should be treated as taxable. | Detailed Reasoning - Other Assets: There are no other provisions in Division 38 that would make your supply of the other Assets GST-free. Therefore, your supply of the other Assets was a taxable supply under section 9-5 of the GST Act. [1] Section 195-1 defines real property to include: (a) any interest in or right over land; or (b) a personal right to call for or be granted any interest in or right over land; or (c) a licence to occupy land or any other contractual right exercisable over or in relation to land.