Private ruling: Crisis care accommodation
Date of advice: 22 March 2016
Published: May 2016
Ruling period: Current and subsequent tax periods

Ruling: Q1: Are you eligible to use the benchmark market values (BMVs) outlined in the GST and non-commercial rules-benchmark market values fact sheet (Benchmark Fact Sheet) to determine whether the provision of accommodation as described in the private ruling request is GST-free for the purposes of subsection 38-250(1) of the A New Tax System (Goods and Services) Act 1999 (GST Act)? | A1: Yes. You are eligible to use the BMVs outlined in the Benchmark Fact Sheet to determine whether the supply of accommodation described in the private ruling request is GST-free for the purposes of subsection 38-250(1) of the GST Act.

Relevant facts and circumstances: • You are registered for goods and services tax (GST) and are an endorsed charity for the purposes of the GST Act. • You have recently acquired (and are in the process or acquiring) various properties that are located close to hospitals or treatment centres. • The properties generally have two bedrooms and two bathrooms, although some are two bedrooms with only a single bathroom (referred to as "the properties" hereafter). • You intend to further your charitable objects by providing accommodation at the properties to patients and their families and carers, for the length of their treatment at hospitals or treatment centres. • In some instances, you may provide accommodation at short notice where patients need to begin treatment immediately. In other instances, you may provide accommodation with advance notice in order for patients to attend routine appointments, check-ups and treatments. • You offer similar services and accommodation facilities in various other locations. However these accommodations have been provided at purpose built centres, as opposed to properties your have acquired off the plan. • Based on data obtained from your other accommodation sites, you: • estimate that the average length of stay for a patient and their families and carers in any of the apartment to be between X to X days; • estimate to receive between $X to $X per night for providing accommodation per apartment. • You advised: • You intend for the accommodation to be provided to the patient and their families and carers including spouse, parent, child, relative or friend. • You intend to provide accommodation only on a temporary basis to the patient and their families and carers as the patient is required to return to their principal place of residence upon completion of their treatment. • The patient will assign their 'Patient Transport Subsidy' (PTS) for accommodation to you in consideration for the supply of the accommodation at the properties. The consideration for the accommodation will be for nominal consideration. • The patients and their families and carers are provided with accommodation without incurring any direct out of pocket expenses. • The accommodation you provide at the two properties will be fully furnished two bedroom apartments including linen, crockery, cutlery and utilities for the use of the patient and visiting family and carers. • Patients and their family and carers who are residing at the properties are also provided with access as necessary to support services (including counselling) and other educational services at no additional charge. The support and other educational services are provided by you as part of your broader charitable objectives.

Relevant legislative provisions: Subsection 38-250(1) of the GST Act.

Reasons for decision: Summary: Subsection 38-250(1) of the GST Act states: | Detailed Reasoning - Nominal consideration etc.: A supply is GST-free if: (a) the supplier is an *endorsed charity, a *gift deductible entity or a *government school; and (b) the supply is for *consideration that: (i) if the supply is a supply of accommodation- is less than 75% of the *GST-inclusive market value of the supply; or (ii) if the supply is a not a supply of accommodation- is less than 50% of the *GST inclusive market value of the supply. * Denotes defined terms in the GST Act. The ATO has developed two publications in consultation with the Charities Consultative Committee to assist charities to determine whether supplies are GST-free under subsection 38-250(1) of the GST Act. The public ruling Non-commercial activities of charities cost of supply and market value tests (the Market Tests Public Ruling) provides three successive market value tests to assist charities to determine the GST-inclusive market value of a supply for the purposes to determine whether a supply is GST-free for the purposes of subsection 38-250(1) of the GST Act. The Benchmark Fact Sheet provides BMVs for a range of supplies made by certain organisations which can be used as the "GST-inclusive market value" for the purposes of subsection 38-250(1) of the GST Act. The inclusion of the BMVs for the different supplies was put forward by charities and non-profit organisations through the Charities Consultative Committee. Under the Benchmark Fact Sheet, eligible organisations may choose to use the BMVs instead of applying the successive tests provided in the Market Tests Public Ruling. The object and purpose of the Benchmark Fact Sheet is to make it easier for charities to determine whether certain supplies they make are GST-free for the purposes of subsection 38-250(1) of the GST Act, in particular where the market value of a supply is not easily obtained or which might be disproportionately costly to obtain. The Benchmark Fact Sheet includes BMVs for the provision of "crisis care" accommodation for both short term and long term accommodation. The term "crisis care accommodation" is not defined but our view is that it refers to the provision of accommodation to assist people in crisis situations requiring immediate intervention, such as seeking a safe haven or avoiding homelessness. It is accommodation which is supplied in an "emergency" or "crisis" scenario, an example of which would be the supply of accommodation by a women's shelter. You intend to supply accommodation at the properties to patients with their families and carers whilst they are receiving treatment at hospitals or treatment centers. Generally, these patients are required to travel at short notice to begin critical medical treatment. You also supply accommodation to patients and their families and carers to attend routine appointments or treatments. We accept that your supply of accommodation in these circumstances is similar to our view of what is crisis care accommodation for the purposes of the Benchmark Fact Sheet. As the object and purpose of the Benchmark Fact Sheet is to ease compliance costs for charities, we consider that is appropriate to allow you to use the BMVs in the Benchmark Fact Sheet to determine whether your supplies of accommodation are GST-free for the purposes of subsection 38-250(1) of the GST Act. You also have the option to use the successive tests outlined in the Market Test Public Ruling. There is no requirement for you to obtain a valuation by a licensed valuer when using the market value tests. You can undertake a valuation of your supply of accommodation by comparing it with other similar supplies in the market, for example, by obtaining a valuation from a local real estate agent or comparing to advertised rates of the same or similar accommodation in the area.