GST relief for owners of apartment blocks
Investors who own whole blocks of flats have been given a reprieve by the Australian Taxation Office, which has ruled that if the owners decide to strata-title their properties they will not have to pay GST. The ruling has clarified a situation in which owners were previously taxed 10 per cent on total sales when strata titling, as the ATO deemed each unit to be a “new property”.
John Hill, deputy president of the Real Estate Institute of Australia, welcomed the ruling on behalf of landlords, saying that the previous ruling “just didn't make sense”. But he said that the new ruling doesn't go far enough, as it doesn't include residential developers. They will still have to pay GST if and when they strata-title a property. In addition, GST will still be applied if an owner refurbishes a block and intends to strata-title it for profit.