GST on boarding house query?

Is GST payable on purchase of boarding house if vendor/seller is not registered?

From my research, if you are an individual/entity below the $75k threshold then you do not need to register nor do you need to pay GST on purchase?

Does it matter if property existing tenancies or vacant possession (and if it is vacant possession can this be countered if it has been rented as a boarding house historically ie over x last months and has just been emptied for sale?)

Thanks guys

 

Probably
are they registered or required to be registered?

The starting point that that property sale attracts GST.

get some legal advice.

 

Boarding houses are complex. The first matter to consider is unrelated to it being a boarding house. It is necessary to determine if the premises are residential or non-residential. There is a thing called commercial residential premises and they may be affected by GST. If its residential premises the sale may be input taxed. No GST applies.

The $75K threshold applies to taxable supplies. If the vendor of the premises is reg for GST the sale may be taxable but made under the going concern basis. This requires the buyer to register and remain registered for a period of time. And then remit GST on taxable supplies if applicable. Vacant premises probably wont pass the going concern basis.

I would want to seek very diligent advice on if it is a boarding house according to the views in GSTR 2012/5 and /6 Its easy to assume it is and later learn it is not. I have seen parties contract and agree to the going concern basis to learn the supply wasnt taxable in any event and the whole contract was build on sand and misled the buyer to a false belief concerning GST. Assumptions rather than facts. A boarding house is NOT what most people think even when the tax ruling is read. And the ATO adopt a strict view that extends outside the relevant tax ruling which I feel is improper (as it is based on local Government and state law) but so far it is to be tested. The GSTR doesnt even mention what they will throw at you as evidence. They will go to the state goverment register of boarding houses. And if its not listed you could even trigger a major council issue.

The key issue that must be addressed is whether the premises satisfy the tests in the Karmel decision. (Clue : Para 181-184 of Ruling /6) And whether the premises meet the definition of a hostel.