Sector Welcomes Win for Affordable Housing
9 January 2014 at 10:06 am
The Not for Profit sector and the Federal Opposition are claiming a win for affordable housing after the Australian Tax Office decided to not charge full GST on moveable home estates.
Caravan park and moveable home estate residents had raised concerns over ATO’s draft ruling, which proposed residential parks pay the full 10 per cent GST opposed to the 5.5 per cent they were paying. Residents feared the GST increase would result in a rent hike.
However the draft ruling has now been withdrawn and moveable home estates will continue to be treated as commercial residential premises with the same GST rules for long-term accommodation.
“Over the past seven weeks, we have been considering a range of submissions from the community and stakeholders as part of our consultation process,” Tax Commissioner Chris Jordan said.
“We have carefully considered the legal arguments and practical implications and decided that we don’t need to change the existing GST treatment of these estates.
“Our preliminary view had been that moveable home estates were not sufficiently similar to caravan parks to be commercial residential premises.
“With the benefit of submissions, it is evident that while moveable home estates have changed, they are still similar enough to caravan parks to receive the concessional treatment. In particular, both involve letting of sites separately to the building, and provide communal facilities to residents.”
Jordan said the ATO had received many comments from industry groups, residents and tax professionals during the consultation process.
Census figures in 2011 showed there were 77,000 people living in caravan parks and about 2200 people living in manufactured home estates.
Catherine Beadnell, from Housing and homelessness support Not for Profit Homeground, said Homeground was pleased by the decision to withdraw the draft ruling.
“With a huge affordable housing crisis within Victoria and nationally, we don’t need anymore strain on that end of the market,” she said.
Shadow Assistant Treasurer Andrew Leigh said Labor had campaigned strongly over some months against the plan to charge GST to people living in moveable homes.
“Labor’s primary concern was the impact on people with small and fixed incomes and who can least afford a rent hike,” Leigh said.
“After a period of surprising silence the Abbott Government finally acted so the ATO ruling never got beyond the draft stage.
“The Government’s back down provides some welcome relief to pensioners and other vulnerable Australians, who had joined the grass roots campaign against this wrong-headed measure.”