Water and Sewerage - NSW Residential (Land Lease) Communities Regulation 2015
Under Charges for water and sewerage must be undertaken in accordance with the Act. An operator is not allowed to charge the home owner an amount that is more than that charged by the utility service provider or regulated offer retailer who is providing the service for the quantity of the service supplied to, or used at, the residential site.10 Usage must be separately measured or metered and the operator must give the home owner an itemised account and allow at least 21 days for payment to be made.
Goods and Services Tax Determination GSTD 2000/10 Point 10.
Supply to landlord is GST-free
10. Supplies of water and sewerage services to the landlord may be GST-free. Where the supply under the lease to the tenant involves an incidental provision of water this will not be a supply of water for the purposes of the GST Act. Unless the lease agreement specifies that the landlord will make a separate supply of water to the tenant, any contribution by the tenant to the landlord's expenditure on water will not be consideration for a GST-free supply of water. Where a single supply is made by the landlord, the amount payable by the tenant in respect of water or sewerage will be subject to GST if the supply of the premises is a taxable supply.
As such, regardless of whether the outgoings for which you are liable as landlord of the Premises are not a taxable supply or GST-free, the payment of outgoings by the Lessee is not a payment for a supply that has the same character as the supply made to you. The outgoings payable are made essentially for your supply of the Premises and not for the particular supply made to you to which the outgoings relate. As such, the payment of the outgoings to you is part of the consideration for your taxable supply of Premises to the Lessee. It does not carry the same character as the supply made to you (e.g. GST-free or not subject to GST).
Whether the lease deals with the payment of the rent and the outgoings under separate clauses or they are invoiced separately is irrelevant. As the lease of the Premises and the outgoings forms a single taxable supply, the outgoings are subject to GST.
- Property owner receives the gst free water bill in their name, the resident (tenant) has a water meter attached to their home, we read the meter and then invoice them individually.
- My read of point 10 re GST is that we are required to charge GST to that invoice.
- The NSW Residential (Land Lease) Communities Regulation states that we are not allowed to charge any more than what the property owner is billed for. Adding GST would be an extra charge.
- Does that mean we are required to embed GST into an invoice amount, such that the resident (tenant) is not paying any more than what the property owner has paid for, and the property owner has met its GST obligations?
- Or is there another interpretation?
Embedded GST gst free water bill is $3 a Kl resident uses 20KL cost to resident is $3 x 20Kl = $60 Invoice reads $54.55 + $5.45 GST=$60
Adding GST would be $60 + $6 GST = $66 (which is more than owner paid and therefore breaches the NSW Residential (Land Lease) Communities Regulation 2015
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