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BellaDenny(Enthusiast)Enthusiast
29 Apr 2021

Hi all, My company with business activity is telecommunication and register for GST, bought a residential property, using it as warehouse office and rent out 2 rooms to us, directors.

Rent income does not include GST.

I understand that:

For expenses related to business, I can claim GST.

For expenses related to the residential property that company has to pay as landlord, I cannot claim GST.

For common expense that I cannot define related to business or residential property such as building insurance, lease improvement, renovate office, can I claim GST on it?

Thank you.

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StephATO(Community Support)Community Support
ATO Certified Response30 Apr 2021

Hiya @BellaDenny,

You would need to work out what percentage of the expenses can be attributed to the taxable income. There are two ways you can calculate the amount, either based on monetary amount (probably easier to calculate if you were renting out all three areas.) Or based on the percentage of floor space. If you use the relative floor method you must consider the value of the relative floor area and the relative price of the different types of floor space, e.g. residential and commercial floor space will be priced differently. If the value per square metre is variable then you should apportion this according to that value.

If you need further guidance, I recommend looking at the GST ruling I will link below, and if you have any further questions you can send an email with all your specific information to the GST mailbox, also linked below.

GSTR 2001/8: Goods and services tax: Apportioning the consideration for a supply that includes taxable and non-taxable parts.

GST Mail.

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Most helpful replyATO Certified Response

StephATO(Community Support)Community Support
ATO Certified Response30 Apr 2021

Hiya @BellaDenny,

You would need to work out what percentage of the expenses can be attributed to the taxable income. There are two ways you can calculate the amount, either based on monetary amount (probably easier to calculate if you were renting out all three areas.) Or based on the percentage of floor space. If you use the relative floor method you must consider the value of the relative floor area and the relative price of the different types of floor space, e.g. residential and commercial floor space will be priced differently. If the value per square metre is variable then you should apportion this according to that value.

If you need further guidance, I recommend looking at the GST ruling I will link below, and if you have any further questions you can send an email with all your specific information to the GST mailbox, also linked below.

GSTR 2001/8: Goods and services tax: Apportioning the consideration for a supply that includes taxable and non-taxable parts.

GST Mail.

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