John Mahoney was recently featured in Resort News – the leading magazine for accommodation industry professionals – discussing a significant private ruling from the Australian Tax Office regarding GST treatment for leaseback arrangements and other methods of guaranteeing minimum income levels to owners.
The ruling confirmed that when a manager leases apartments from owners and directly sublets them to guests for short-term accommodation (while providing various other services), GST applies to the tariffs paid by guests. This is because the manager is making the supply in their own right, rather than acting as an agent. Importantly, under these circumstances, the manager does not pay GST on rental payments to the owner or on revenue earned above the guaranteed rent amount.
The article also provides a detailed breakdown of the key features of both leaseback arrangements and letting appointments with guaranteed returns. You can read the full article here.
Mahoneys is one of Australia’s leading management rights law firms, with a team of industry-leading lawyers who have supported the management rights industry for over 20 years.
The firm and its lawyers have been recognised in Doyle’s Guide to the Australian Legal Market and Best Lawyers in Australia for property law.
Feel free to contact our dedicated management rights team if you need assistance buying, selling or running a management rights business.
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