Is there GST on Strata Levies?

3 min read
gst lawyers sydney

Navigating the complexities of the Australian tax system, particularly in relation to strata management, can be daunting for most property owners. A common question that arises is whether the Goods and Services Tax (GST) is charged on strata levies in New South Wales. Strata levies, raised by the body corporate or owners corporation to fund the management of common property within a strata scheme, are a mandatory fee for unit owners and often a significant part of managing such properties. This article will look at whether these fees or levies on unit owners include GST.

Table of Contents

A Simple Explanation of GST

Most people in Australia are familiar with GST as a concept.

But before we leap in, it’s worth just doing a quick GST 101 explanation in case you’re new to the idea.

Here’s how GST works in a nutshell:

  1. If you run an enterprise in Australia and have a turnover above a particular threshold, you might have to “register” for GST.
  2. If you are registered for GST, you have to charge GST on most goods and services that you provide and pay that amount to the Australian Taxation Office. You can also claim input tax credits for the GST you have to pay to others to supply your own goods and services. These credits reduce the amount you might otherwise have to pay to the ATO;

That’s the simplified version, at least. Of course, being tax law you can rightly imagine that there are any number of ifs and buts.

GST on Strata Levies – Does it Matter?

So why do we care whether you have to charge GST on strata levies?

Well, it’s going to have a number of practical effects:

  1. First, your strata levies are going to go up by 10% – the amount of the GST;
  2. Second, your owners corporation will need a system in place to issue tax invoices to the owners who are paying the levies;
  3. Third, the owners corporation will have to implement a system of book-keeping so that its business activity statements are prepared, and the relevant GST is paid to the ATO;
  4. Finally, the owners themselves, depending on their situation, may then have an entitlement to claim input tax credits from the GST they are now paying on their strata levies (more likely in commercial units than residential).

So in short: it’s going to have an impact.

So is GST payable on Strata Levies or Not?

Let’s work through the process, knowing what we know.

The first question is whether the owners corporation needs to register for GST.

Does an owners corporation carry on an enterprise? Well, it maintains and repairs property, and manages the finances of the scheme. So in tax terms, the owners corporation is “carrying on an enterprise”.

Therefore, it must register for GST if:

  1. Its turnover (which includes levies themselves) is more than $75,000 for an owners corporation that is not non-profit.
  2. Its turnover is more than $150,000 for a non-profit owners corporation.

Yes, it is possible for an owners corporation to count as a “non-profit” in some circumstances, but you’re best to get some specific advice on that topic.

If the owners corporation has to register for GST, then it will:

  1. Have to start charging GST on its fees and levies and issuing tax invoices accordingly; and
  2. Be able to claim GST credits for purchases.

Will Collecting GST on Strata Levies Actually Matter?

In practical terms, will it make any real difference if there is GST on strata levies?

There are going to be two main practical impacts:

Firstly, the owners corporation is going to have greater administrative burden because of the requirements to issue formal tax invoices, record GST collected and GST paid, and complete periodic business activity statements for compliance purposes.

Second, some owners are effectively going to have 10% greater levies, since they will be required to paid the GST and have no ability to claim the GST credits back from the government. They are in the same position as every consumer who has to pay GST on their goods and services in that respect, but given that levies can be quite high in some cases, this could have a real impact on cash flow for some owners.

If your owners corporation needs help with compliance in this or any other area, don’t hesitate to get in touch and we’ll steer you in the right direction.

Loading

Loading

Picture of Authored By<br>PBLTeam

Authored By
PBLTeam

Director Lawyer, PBL Law Group

Find what you need
Share this Article

Book a 15-Min Consultation​

Rated 5-Star By Our Clients

Jye Hall
Anita Bradley has been an absolute dream to deal with. Anita's conveyancing skills and knowledge knows absolutely no boundaries along with her effective communication skills which has made selling and buying a completely stress free exchange for us. We recommend PBL Law to everyone looking for outstanding service. We will definitely be returning clients.
Kushlan Aluwihare
PBL Law Group were fantastic. Anita from PBL worked with us closely during our property search and made the exchange and settlement process smooth and stress free. Highly recommended.
Gail Whitford
PBL handled my late mothers estate, they were very obliging and patient with any and all questions that we had, thank you to David , Sharon and the other staff that we dealt with, everyone was so easy to talk to and friendly .David came to the home where my Mother was living and helped her to get her will in order, Sharon helped us through the process of executing her wishes when the time came even doing a house call which was so much easier, thank you all so much
S M
I have experienced an excellent service from PBL (especially from Anita) during the sale of my recent property on Central Coast, and during the purchase of our current property in Sydney. Throughout many challengers, especially with the sale, Anita presented her very professional and knowledgeable conveyancer, positively solving all obstacles. "Above and Beyond" Award going to Anita!!! :-)
Amanda Reitzin
The five-star reviews are well-deserved. I needed a motion and a bylaw drawn up for urgent repairs of my strata unit and the AGM was in two weeks' time. My solicitor was friendly, efficient, knew what documents to ask for, and had all the paperwork prepared well within the timeframe. She also took the time to run through all the legalese and the different possible scenarios with me to make sure I understood. I am so glad to have found this firm and I will not hesitate to use their services again in future if the need arises.
Ricky Cooper
Anita is amazing! So attentive, approachable and communicates everything every step of the way. I have now bought and sold property with Anita and I cannot recommend her highly enough.
Ron Thomsen
Our Commercial Property conveyancing was handled very professionally. Anita’s experience and responsiveness was an asset in this transaction.
Trace M
I am so grateful for Anita Bradley from PBL Law Group helped me with this property settlement, she has went above beyond to ensure I understand everything because of our deafness. I will recommended Anita or their team. Thank you so much for all the hard work you have done for us.
Tricia Wheatstone
For almost 18 months I have been a client of Alex Ilkin. Alex is very knowledgeable and professional and has consistently provided me with thorough, honest and well set out advice, including steering my case through appeal proceedings. He always worked for my best interests with integrity and compassion. I recommend Alex and his team at PBL.

Latest insights & Practical Guides

Speak to us Now or Request a Consultation.

We will call you within 24 hours.

How Can Our Expert Lawyers Help?

Strata Law

Property and strata disputes, building defects claims, setting up new Owners Corporations and more…

Construction & Building Law

Construction and building disputes, building defects, delays and claims, debt recovery and more…

International Estate Planning

Cross-border estate planning, international wills and trusts, tax-efficient wealth transfer strategies and more…

Commercial & Business Law

Starting and scaling your business, banking and business financing, bankruptcy and insolvency and more…

Planning & Environment Law

Environment and planning regulation, land and environment court disputes, sub-divisions and more…

Wills & Estates

Creating, updating and contesting wills, estate planning and administration, probate applications and more…

Thank You For Your Request.

We’ve received your consultation request and will contact you within the next 24 hours (excluding weekends).

Jye Hall
Anita Bradley has been an absolute dream to deal with. Anita's conveyancing skills and knowledge knows absolutely no boundaries along with her effective communication skills which has made selling and buying a completely stress free exchange for us. We recommend PBL Law to everyone looking for outstanding service. We will definitely be returning clients.
Kushlan Aluwihare
PBL Law Group were fantastic. Anita from PBL worked with us closely during our property search and made the exchange and settlement process smooth and stress free. Highly recommended.
Gail Whitford
PBL handled my late mothers estate, they were very obliging and patient with any and all questions that we had, thank you to David , Sharon and the other staff that we dealt with, everyone was so easy to talk to and friendly .David came to the home where my Mother was living and helped her to get her will in order, Sharon helped us through the process of executing her wishes when the time came even doing a house call which was so much easier, thank you all so much
S M
I have experienced an excellent service from PBL (especially from Anita) during the sale of my recent property on Central Coast, and during the purchase of our current property in Sydney. Throughout many challengers, especially with the sale, Anita presented her very professional and knowledgeable conveyancer, positively solving all obstacles. "Above and Beyond" Award going to Anita!!! :-)
Amanda Reitzin
The five-star reviews are well-deserved. I needed a motion and a bylaw drawn up for urgent repairs of my strata unit and the AGM was in two weeks' time. My solicitor was friendly, efficient, knew what documents to ask for, and had all the paperwork prepared well within the timeframe. She also took the time to run through all the legalese and the different possible scenarios with me to make sure I understood. I am so glad to have found this firm and I will not hesitate to use their services again in future if the need arises.
Ricky Cooper
Anita is amazing! So attentive, approachable and communicates everything every step of the way. I have now bought and sold property with Anita and I cannot recommend her highly enough.
Ron Thomsen
Our Commercial Property conveyancing was handled very professionally. Anita’s experience and responsiveness was an asset in this transaction.
Trace M
I am so grateful for Anita Bradley from PBL Law Group helped me with this property settlement, she has went above beyond to ensure I understand everything because of our deafness. I will recommended Anita or their team. Thank you so much for all the hard work you have done for us.
Tricia Wheatstone
For almost 18 months I have been a client of Alex Ilkin. Alex is very knowledgeable and professional and has consistently provided me with thorough, honest and well set out advice, including steering my case through appeal proceedings. He always worked for my best interests with integrity and compassion. I recommend Alex and his team at PBL.