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| GST - Basics |
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Lessors cannot charge GST on rental income they receive from tenants of residential properties.
The supply of the residential property by a lessor to a tenant is an input taxed supply.
Input taxed supplies are not subject to GST.
Residential lessors pay GST on some property expenses, such as insurance premiums
and repairs and maintenance but cannot claim a refund of the GST included in the cost of these items.
The lessor is treated as the final consumer who pays the GST.
The renting of commercial properties is a taxable supply. Commercial rents are subject to GST, and GST included
in the expenses of commercial renting can be claimed back as an input tax credit.
So Where the lessor rents a residential property and commercial property the expenses and rents relating to residential
property must be separately recorded.
Only the rentals and expenses from commercial property rentals are recorded in the Business Activity Statement (BAS).
§ Where commercial property is rented for residential use, the rent is not subject to GST, and GST included
in the expenses can not be claimed back as an input tax credit;
§ GST is payable on rents from a residential property rented for commercial use, and GST included
in expenses relating to that property can be claimed back as an input tax credit.
§ Special provisions apply to caravan park owners and to the proprietors
of certain classes of rooming houses.
It is notable that residential rents are free of GST,
but residential lessors can't claim GST paid on expenses.
But doctors and dentists, whose fees are also GST free can
claim back the GST paid on their expenses.
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Advertising space for services for property owners
is available both on this website and in our newsletter.
Phone 04 13 99 52 06
We will place on our website free of charge the business card
of enterprises offering discounts to our members.
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FAQ Frequently Asked Questions
What does the Property Owner's Association of Victoria think about Negative Gearing ?
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Negative gearing does not affect House prices anywhere as much as Interest Rates.
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That it is only a minor part of the issues confronting residential property lessors.
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That it does not actually cost the Government much
because most of the losses are incurred by low income investors, the actual tax reductions in many cases are
almost zero.
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But because of the exaggerated claims of realtors,
if it was ended, a consequential
shortage of rental housing would emerge within a short time frame.
What does the Property Owner's Association of Victoria think about Land Tax ?
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It is a specialised levy that is applied to residential property investors,
but not to farmers, and certain others for whom land is an essential component
of their business. It is simply inequitable.
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Land tax, because it totals up all the land owned (“aggregate value”),
may more than treble the amounts of taxes payable on Council Rates,
- Big organisations are strata-ing and leasing back,
in order to survive, and now those organisations resist any changes to land tax
- Because big organizations -- and various notional not-for-profit organizations
have the means and processes to avoid or at least very greatly avoid paying Land Tax ,
only the small players pay it.
Thus Land Tax is disproportionately penalising the small players.
- If there are any large organisations left paying
a lot of land tax, they are in the process of selling off too.
- Industry, notably the Motor
industry, is closing down at least in part because of our tax regime.
- In the UK and NZ, aggregate land tax was abolished after
their GST/VAT was created. In Australia the elimination of Land Tax
was promised ahead of the establishment of our GST -- but this promise
proved to be one of those non-core promises.
Click to return to the Home Page of the Property Owners' Association of Victoria
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The POAVic offers its members seminars, training, an opportunity to meet and
exchange ideas, and a source of reliable information on issues affecting
the owners of residential property - including not only houses and apartments,
but boarding houses and backpackers. By joining -- your support will enhance
and strengthen our scope to influence governement (and opposition) policies
that affect us. We supply practical help and advice on the various issues affecting property
management. Its wise to join now in advance of any sudden issues.
Click here to download our brochure.
as a PDF.
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| Notes on the Retail Leases Act |
What is included in the RLA?
The Act covers far more than shops --
it covers any business that sells a good or service, so it can include all retail premises, most offices and some industrial.
Security Bonds/Deposits
These monies must be held in a specific interest bearing account and the interest needs to be partly distributed to the tenant. Statements need to clearly show the interest paid.
Land Tax is excluded
Land Tax is not recoverable under the Act and to attempt to do so is in fact now an offense.
Leases and Disclosure Statements
A draft lease and disclosure statement needs to be provided to a prospective tenant as soon as negotiations commence.
This is a chore -- but keeping to the book avoids later problems.
Outgoings
Either budgeted itemised outgoings for both the year past and upcoming and copies of outgoings invoices are to be supplied to the tenant.
Lease periods under 5 years
If the lease term and the first option period are under 5 years you must request permission from the Small Business Commission.
Compliance Issues
Whether the paperwork required under the RLA is appropriate or ultimately workable is immaterial.
This new regime is the law. Penalties are substantial and the mediation process is very time consuming. It is a lot easier to comply.
Acknowledgement
These notes are derived in part from remarks made by Mr
Richard O'Callaghan Chairman of the C&I Chapter of the REIV.
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| Combined Residential/Retail |
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The above is a pix of two typical suburban shop cum dwellings.
It is possible for the owner to become embroiled in dealing with
both the Residential Tenancy Tribunal and the Retail Tenancy Tribunal
in dealing with such a property - despite leasing
the combined shop and dwelling to a single
occupier. The POAVIC aims to both inform members as to present issues
and to make representaions on their behalf as to ways in which regulations etc can be improved and clarified.
Land tax relief doesn't soothe
Download this Jun 1 2006 article from the Herald-Sun.
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A member of POAA
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Property Owners Association of Victoria Inc.
PO Box
620, South Yarra, Victoria 3141
General Enquiries: 0403 008 090
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