Strata Companies and GST

GST on levies, BAS reporting, submitting tax returns. Why register for GST?

Summary

Not all Strata Companies need to register for GST, but any Strata Company may elect to register. Strata Companies that collect more than $150,000 in income, or spend over $150,000 in expenditure (or plan to) over any 12 month period must immediately register for GST under current regulations.  A Strata Company may not de-register for at least 12 months after registering for GST. 


Strata Companies & GST

There is a common misconception that Strata Companies are exempt from GST. They are not. 

Strata Companies that collect more than $150,000 in income, or spend over $150,000 in expenditure over any 12 month period must immediately register for GST under current regulations.  A Strata Company may not de-register for at least 12 months after registering for GST. 

The only difference between being Registered for GST, or NOT being registered for GST is the requirement to provide BAS returns, reporting all the GST you have collected, and all the GST you have paid.  

When a strata company is not registered for GST, it still needs to raise levies including GST, and it still pays the GST portion of contractors invoices. Therefore, being inclusive of GST makes the accounting of these things much cleaner, as the GST is included in the totals raised, and the totals spent. If the strata company later registers for GST, then it is clear what the GST elements are.

There can be other concerns for example with a business that may be liable for paying for a levy notice. The GST paid may be relevant to that business in respect to their BAS returns. So it is important that the GST components are clearly noted.

What does this mean for the strata company?

Any Strata Company that is registered for GST must meet the ATO Bas Return reporting requirements. ESM can assist by engaging a tax professional to carry out this function. 

Please refer to this link for information from the ATO website: ATO website link: Strata schemes and real estate agent services.