GST – Supplies of properties used for transitional housing
These Public Rulings consider the GST treatment of supplies of properties by landlords to organisations for use in the Ministry of Housing and Urban Development’s Transitional Housing Programme. Many organisations don’t own their own properties so enter into leases for properties with private landlords (which may include developers, investors and motel owners). There had previously been some uncertainty with how the landlords account for GST.
These items specify when the landlords will be subject to GST and when they have exempt supplies. BR Pub 24/01 applies to a supply of a property that will be an exempt supply on the basis that the property will be used for the principal purpose of accommodation in a dwelling.
BR Pub 24/02 and BR Pub 24/03 apply to supplies of a property that will not be exempt supplies. The commentary to these Rulings assists in determining whether the supply will be taxable or exempt.
These rulings have been prepared in response to requests for clarity in this sector. The conclusions in these items have no effect on the rent paid by transitional housing tenants, which is calculated based on a fixed proportion of their income.
Any landlords with specific queries about their situation can send a web message through their MyIR account using “transitional housing” in the subject line and this will flow through to IR staff familiar with the issues in this area.
Goods and Services Tax Act 1985, ss 2 (definitions of “commercial dwelling”, “domestic goods and services”, “dwelling” and “principal place of residence”), 8(1), 10(6), 14(1)(c) and 14(1)(cb)
Residential Tenancies Act 1986, ss 2 (definition of “premises”), 5(1)(y), 8, 38 and 48.
Adams v Massey University (DC Palmerston North TT 43/94, 10 October 1994)
Case L75 (1989) 11 NZTC 1,435 (TRA)
Case Q46 (1993) 15 NZTC 5,227 (TRA)
ECC Southbank Pty Ltd as Trustee for Nest Southbank Unit Trust v FCT 2012 ATC 20-336 (FCA)
McKenzie v Unilodge Management (Tenancy Tribunal Auckland TT No. 1239/02, 18 July 2002)
Weidtmann v 139 Property Management Ltd (Tenancy Tribunal Auckland TT No. 2421/02, 19 December 2002)
Wigram Accommodation Ltd v Kelly (DC Christchurch MA153/99, 1 February 2000)