GST on property management

Question from Vicki updated on 10th July 2019:

We need some help getting an answer with regards to our property management company charging GST on property management services ? We have one company that looks after our mix of commercial and residential properties.

It's our understanding that we have to CHARGE GST on all services whether residential or commercial, but is it the case that GST can only be claimed by the commercial percent of property if GST registered ? We know we cannot claim GST on residential expenses, but does this include property management for the residential ?

I'm checking with our accountant also but ir seems to be a grey area or different answers depending on who you ask...

Our expert Matthew Gilligan responded:

You basically have all the right answers there. Your property management company is required to charge GST on all services provided, whether those services relate to a commercial property or a residential property. On the other hand, the company that owns the mixture of commercial and residential property can only claim the GST incurred on the property management services to the extent that they relate to the commercial activity. GST cannot be claimed on expenses incurred in relation to the provision of residential rental accommodation.

Matthew heads GRA's specialist property and asset planning division. He helps clients create optimal tax structures and build wealth through property. He has an extensive buy-to-hold property portfolio, is currently involved in over a dozen developments, and is author of two books - Property 101 and Tax Structures 101.

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