GST Applied to Residential Properties
GST on fees may be made either inclusive or exclusive. For properties that are residential, the situation is simple. Residential rents are GST exempt. Depending on the terms of the management authority contract, you may need to adjust the fees that you charge your Lessors so that they become GST inclusive.
Contracts that were entered into before 8th July 1999 may not be subject to GST depending on the opportunity to renew. We suggest you read the ATO document on GST transitional arrangements for precise details of this interpretation. During the end of month processing, the management fees from these Lessors need to be separated from the others. They may be very few, if any, which fall into this category. You are required to pay GST on fees to all other Lessors regardless of whether you manage to make any adjustments.
Please remember that Lessors are not able to claim GST credits on residential properties. Therefore, even if an Lessor has an ABN you should not enter it onto GeeDee if the property under management is residential. Entering these details onto the system when not required may result in misleading and/or confusing information appearing on the Lessors' statement. If your residential Lessor does have an ABN and you wish to record it, we recommend using the Lessors Notes.
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