Private ruling: GST and supply of residential premises
Date of advice: 7 August 2024
Published: 16 September 2024
Ruling period: xx August xxxx to xx August xxxx

Ruling: Q1: Are you making a taxable supply in accordance with section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when you supply residential accommodation in residential premises by way of sublease? | A1: No. You are not making a taxable supply in accordance with section 9-5 of the GST Act when you supply residential accommodation in residential premises by way of sublease. Your supply of accommodation in the premises is a supply of residential premises that is input taxed under section 40-35 of the GST Act. Your supply is not a supply of commercial residential premises or a supply of accommodation in commercial residential premises for it to be excluded from being input taxed. | Q2: Are you required to be registered for GST in accordance with section 23-5 of the GST Act where the rental payments that you receive in a 12 month period are more than $75.000? | A2: No. You are not required to be registered for GST in accordance with section 23-5 of the GST Act. Input taxed supplies are not included in calculating your GST turnover. As the only income that you generate is from the supplies that are input taxed, your GST turnover does not meet the registration turnover threshold even if the rental payments that you receive in a 12 month period are more than $75,000. You do not satisfy the condition in paragraph 23-5(b) of the GST Act for you to be required to register for GST.

Relevant facts and circumstances: You are not registered for GST. You make supplies by subleasing furnished houses to the public. The houses have a number of bedrooms and have the features of a normal house. They are in the style of a boarding house. You furnish the houses with the usual household items. In some rooms, the tenants bring their own furniture. None of the houses, or parts of them, are used for commercial purposes such as a shop or office. The utilities are connected under your name. The costs are passed on to the tenants and worked out each quarter when they fall due. You do not provide services such as cleaning and mowing. The tenants are required to do these themselves. On occasion, you may clean or mow if the real estate agent inspects the house. You do not provide food to the tenants. You enter into lease agreements with the tenants The average length of the lease is x months. Tenants are required to pay a bond which is lodged with the relevant authority The only income you generate is the rental payments received from the tenants.

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 23-5 | A New Tax System (Goods and Services Tax) Act 1999 section 40-35 | A New Tax System (Goods and Services Tax) Act 1999 section 188-15 | A New Tax System (Goods and Services Tax) Act 1999 section 188-20