GST - How do the compulsory zero-rating of land rules apply to transactions involving commercial leases?
Section 11(8D) of the Goods and Services Tax Act 1985 contains the compulsory zero-rating of land rules for commercial leases. This question we've been asked explains how s 11(8D) operates. It covers various factual situations, including:
- the exclusion for rents and lump sum payments of 25% or less of the term consideration;
- stand-alone lease assignments;
- lease assignments in the context of business asset sales;
- lease procurement services in the context of business asset sales;
- lease procurement services where an existing lease is currently continuing on an implied term; and
- lease procurement services where an existing lease is to be cancelled.
Goods and Services Tax Act 1985 sections 2(1) (“land”), 8(1), 11
Property Law Act 2007 sections 207, 209, 210, 245
Taxation (Annual Rates for 2020-21, Feasibility Expenditure, and Remedial Matters) Act 2021 section 184