Property management GST

Question from Preet updated on 29th July 2020:

Is there meant to be GST on the residential rent collected by a property management company? There should not be any GST on residential property rent but I am confused about the rent collected by the property management company. 

Our expert Matthew Gilligan responded:

GST does not apply to residential rent, whether it is collected by you as the landlord, or by a property management company. The property management company, however, will add GST to the property management fees they charge you. As you will not be GST registered for this rental activity (given that GST does not apply to residential rental), you will not be able to claim back the GST that you pay the property manager, in the same way that you cannot claim back GST you incur on other rental costs such as insurance and repairs and maintenance.

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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