Question: We have a Special Levy going to pay for a contract to address a waterproofing problem. Our strata manager is adding GST to the levy invoices. Is this correct?
Answer: Regardless of a scheme being registered, it pays GST on expenses so has to collect that amount in levies
The ATO site is very helpful on this issue: Strata schemes and real estate agent services
A strata scheme is required to register for GST if:
- it is considered to be a non-profit body and its turnover is more than $150,000 (turnover must include levies on unit owners)
- it is not considered to be a non-profit body and its turnover is more than $75,000 (turnover must include levies on unit owners).
Most schemes will be a non-profit body (as otherwise it may have to distribute interest income or profits from rental or other activities).
Thus the scheme in question could be registered if it elects to be registered (as many commercial schemes do under the above thresholds as the owners are in many cases, GST registered) or would be required to be registered if it meets the above thresholds.
A scheme which is registered will need to conduct BAS statements.
Regardless of a scheme being registered, it pays GST on expenses so has to collect that amount in levies – it just can’t claim GST input if not registered.
This post appears in the August 2021 edition of The NSW Strata Magazine.
Andrew Terrell Bright & Duggan E: Andrew.Terrell@bright-duggan.com.au P: 02 9902 7100