My memory is a little foggy on this Michelle but a couple of years ago I had a client who was a Swiss citizen. She had been charged GST on her management fees and was entitled to a refund from our agency.

Hi Ross

thanks for replying.  I did a little more research with some of the larger accounting firms up here and this is what I received yesterday as a response.  Very generic and non committal (as they are when giving advice) but this is what they said.

On the assumption that the residential property is in Australia, the property management fees will be subject to GST.  That is, while services provided to a non-resident can be GST free in some circumstances (so the question is understandable), there is a specific provision that makes it clear that services related to real property situated in Australia are subject to GST.

Michelle, its timely that you ask this question on the 10th aniversary of the introduction of this wonderful Tax. From my understanding, the only time that GST is refundable, is when a person leaves the country, they calim claim a refund on goods purchased wiothin the previous 30 days, and the goods are leaving the country. As our services are actually enjoyed by the customer here and not capable of being removed fro the country, then there is no refund to an oversas landlord for the GST paid in Australia. Please send me to the section of the Act, if I have got that wrong.

As to your second question, we must add GST to every item we charge a landlord for, whether we paid GST on the item or not. That is different to where we pay an item on behalf of a landlord. One example of that is keys. Our key cutter is under the GST threshold, so does not charge us, however when we on charge our landlord, we must add GST. Silly isn’t it.

If keys are cut, wouldn’t that just be a reimbursement to the agent, and it is the same amount the key cutter charges, without adding GST as that is not a service that is provided by the agent. Or are you referring to charging your fee for arranging it, i.e. the fee that you charge for paying invoices.

Gary, when you seek reimbursement, you must issue an invoice, and that triggers GST. If the key cutter issued an invoice for each set of keys cut, and you then put that invoice through your accounting software, and the owner then paid the key cutter, no GST is included. That is the difference.

Just to muddy the waters Peter, where a residential tenant (no gst invoice is issued for the reimbursement of water usage), does a gst liability arise for the owner?

Franc, wow, mudding waters, with a water charge reimbursement …. is that a “pun”.

Back to the matter. From my understanding, every invoice we issue, as we are GST registered, we must add GST, whether the charge to us contains GST or not. If the tenant pays the utility directly, then there is no GST liability.

If any one has a different opinion, I would be glad to hear it.