@JimmyT said:
Why would a strata scheme need to register for GST? Is this normal? What are you selling?
It’s the law – OC/BCs that have an income of $75,000 or more per year (12 months forward projection or 12 months past actual income) must register for and pay GST. And not only pay GST but do BAS (Business Activity Statements).
And it’s not just regular levies that are counted for the GST threshold. Special levies and even unpaid levies (which are counted as future revenue) can tip even smaller OC/BCs over that $75,000 threshold easier than one might imagine. That happened to the 12 lot building where I live and chair the OC.
The ATO also doesn’t consider OC/BCs as “not for profit” organizations which would at least extend the GST threshold to $150,000.
@Missy said:But remember that means 10% of levies go to the ATO, this will mean a dip in the strata funds, this tends to mean if the budget is done correctly (and depending on the expenses) the levies will increase by 10%.
Missy, shouldn’t stratas that pay GST also receive GST credits on their goods and services expenditure?
So the net effect for a strata that spends all its levy income on goods or services should be close to GST neutral? Eventually?
That’s the way I thought it works. But trying to get information from our Strata Manager on our recent GST registration is like trying to get blood out of a stone.
We didn’t actually end up exceeding the $75,000 threshold. We raised a special levy that took it close. But thanks to some late levy payers, our forward projections including their outstanding levies did temporarily exceed the threshold.
When to exit the GST system is now our issue. Even if GST credits mean all or most of the GST paid is eventually returned, there’s still all the administration around GST that has to be paid for (BAS etc).