Private ruling: GST and claiming input tax credits
Date of advice: 4 October 2019
Published: November 2019
Ruling period: 1 July 2019 to 31 December 2022

Ruling: Q1: Can Individual A (the Owner) claim an input tax credit for the acquisition of the residential apartment (the Apartment)? | A1: No. As the Owner is not registered or required to be registered for GST they are not entitled to claim any input tax credits on the acquisition of the Apartment.

Relevant facts and circumstances: Individual A (the Owner) purchased an apartment which consists of residential premises (the Apartment). The Owner purchased the Apartment under a contract from Entity A (the Vendor). This contract (on page 2) includes a heading 'Tax information' and in the line "GST: Taxable supply" there is an X inserted in the box against the words "yes in full". The Apartment is located with a resort (Holiday Resort), where each apartment is individual owned. The Owner acquired the Apartment for the purpose of leasing out the premises. The resort is currently managed by a manager and the Owner can choose to either appoint the current manager (for booking purposes only) or manage the Apartment in their own right. The Owner has chosen to enter into an agreement with the manager under which the manager has been appointed to act as the on-site accommodation letting agent. A copy of this agreement has been provided as part of this request. Strata by-Laws prohibit the use of the Apartment as a permanent residence or for any other purpose than tourist accommodation. The Owners GST turnover is less than $75,000 annually. The Owner is not registered for GST or required to be registered for GST.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 11-20