Moveable home estates will continue to be treated as commercial residential premises with the same GST rules as those that apply to long term accommodation. This follows the withdrawal by the ATO of controversial Draft GST Ruling GSTR2013/D2 (supplies made by an operator of a ‘moveable home estate’. ‘Moveable home estates’ refers to home parks in which sites for demountable homes are located).
This means the GST concessions available to operators who provide long-term accommodation in commercial residential premises will continue to be available to operators of moveable home estates.
The withdrawal followed consideration by the ATO of comments it received on the draft ruling, which contended that moveable home estates are sufficiently similar to caravan parks for the purposes of para (f) of the definition of “commercial residential premises” in s 195-1 of the GST Act. The ATO said these comments supported the alternative view set out at para 72 of the draft ruling. It said similarities to caravan parks include, among other things, the leasing of a site that is separate from the existing building and shared facilities.
Why the Commissioner opted for the status quo
The ATO said the alternative view was considered reasonably open and accords with the longstanding GST treatment of moveable home estates.
Accordingly, the Tax Commissioner, Chris Jordan, does propose to disturb the existing GS treatment of moveable home estates.
The Commissioner said the ATO had considered a range of submissions, as well as the leg arguments and practical implications before deciding not to change the existing GST treatment of these estates.
Jordan said that “with the be of submissions, it is evident that while moveable home estates have changed, they are still similar ent to caravan parks to receive the concessional treatment. In particular both involve letting of sites separately to the building and ide communal facilities to residents”.
It should be noted that GST ng GSTR 2012/6 (commercial residential premises) has been updated to reflect the view that a home park is a commercial residential premises.
What the draft ruling had said
Draft GSTR 2013/D2 said the ATO acknowledged that since 2000, the caravan and moveable home estate industries had evolved considerably. It said moveable home estates, which were previously considered similar to caravan parks, are now designed to provide long-term accommodation, without the provision of short-term accommodation.
Accordingly, given this change, the ATO said the Commissioner’s position as to whether or not these premises are commercial residential premises had been reviewed.
A welcome change of heart by the ATO
In 2000, when the GST regime commenced in Australia, the ATO adopted the view that moveable home estates were similar to caravan parks and therefore constituted commercial residential premises. However, in an apparent change of mind, the ATO’s view in the draft ruling was that a moveable home estate (mobile home park) is not commercial residential premises as defined in s 195-1.
The ATO’s acceptance of submissions made to the draft ruling, and the subsequent withdrawal of the draft, is welcome.
