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  • #11435
    JCH

      If an owners corporation is “registered for GST”, it must pay GST to the tax office.

      However, does that mean our strata levies raise by 10% from last year?

      Even before the OC was registered for GST, a 10% GST was already included in the strata levy as the OC pays for GST-inclusive Electricity, services from tradespeople, and most other costs in running a strata – so, should we be paying an additional 10% on top of the GST we were already paying previously, just because the OC is now “registered for GST”?

      Moreover, a large proportion of strata levies go toward paying for water, which is a GST-free supply, so, should we be paying 10% GST for this water just because the payment is made indirectly through an OC in the form of strata levies?

      How should strata levies be properly calculated after the OC registers for GST?  I’d like to hear your thoughts.

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    • #28567
      Sir Humphrey
      Strataguru

        Hmm. Usually GST is applied to levies. The OC pays for stuff that adds up approximately equal to the levies. The OC claims the GST back on all that stuff. GST in and out end up cancelling out. 

        I could be wrong but I suspect your OC will have more GST in than out and would end up having to pass on the excess GST. Another good argument for metering water for each unit and each unit being billed separately by the water supplier independently from the OC.

        #28568
        JCH

          Yes, the old system of collective water payement proportioned by unit entitlements is grossly unfair. Some units have only 1 or 2 occupants while others have 4 or 5, but they’re paying the same amount for water, year after year. Unfortunately my building is not new enough to come under the new system.

          The way I understand it is, the OC buys water in bulk from Sydney Water, and then on-sells it to individual owners.  The “supply” they’re “selling” to owners is still water, which is GST-free, so it doesn’t matter anyway from whom we’re buying water.

          And yes, it’s quite possible that my OC has more GST in than out, but I had a look at the budget and found quite a few amounts that look GST-inclusive (eg $550). And the OC added 10% to the entire budget, not just part of it. Not only are they charging GST for GST-free supplies like water, they’re also double-charging GST on other amounts like electricity.

          The bad news is, the OC played a few dirty tricks in the AGM process and got the wrongly-calculated levy passed (by a minority of 12 owners out 90).  Is there some way I can still challenge that levy through the NCAT?

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