- Purchasing a retirement village as a GST-free going concern
- Find out when you may need to pay GST if you continue to operate the retirement village
- If you purchase an operating retirement village as a GST-free supply going concern, you will have an increasing adjustment for GST if you plan to make input taxed supplies through the village
- The increasing adjustment is worked out as 10% of the sale price × proportion of non-creditable use
- The input taxed supplies you make are a non-creditable use
- If the proportion of non-creditable use changes over time, you may need to make additional increasing or decreasing adjustments on your BAS
- Example: operating retirement village as a GST-free going concern
- Wren Pty Ltd acquires an established operating retirement village that makes input taxed supplies of accommodation as a supply of a going concern
- Wren will have an increasing adjustment due to supplying input taxed accommodation in the independent living units
- The additional GST payable by the purchaser will be $1.158 million
- For more information, see Retirement villages and tax, Sale of a business as a going concern, Selling a going concern, Goods and Services Tax Ruling GSTR 2002/5 when is a ‘supply of a going concern’ GST-free
Source: ato.gov.au
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
