When it comes to managing finances in strata communities, compliance with Goods and Services Tax (GST) regulations is paramount for good governance. Understanding GST obligations can be complex, but with the right guidance, strata committees can navigate this terrain effectively. In this comprehensive guide, we break down the essential components of GST compliance for strata communities.
Who Must Register for GST
Registration for GST becomes necessary under specific circumstances determined by the Australian Taxation Office (ATO):
If deemed a non-profit body and its turnover exceeds $150,000 (inclusive of levies on unit owners)
If not categorised as a non-profit body and its turnover surpasses $75,000 (inclusive of levies on unit owners)
Non-Profit Status
Turnover
If a strata scheme's turnover exceeds $150,000, it must maintain GST registration for 12 months. Afterward, the scheme may choose to deregister if income and expenses dip below the threshold. Upon deregistration, quarterly levies will be modified to exclude GST. This scenario can arise where special levies are raised for just one financial year, tipping turnover above $150,000.
Obligations After Registration
Registering for GST must be resolved at an Annual General Meeting (AGM). Once registered, strata schemes are obligated to:
Charge GST on taxable supplies such as administration and capital works fund levies, special levies, and fees for services provided.
Claim credits for GST paid on goods and services purchased for the scheme's use where a valid tax invoice is kept and over $82.50. This process includes expenses related to maintenance and administration of common property such as cleaning, landscaping, gas and management services.
Lodge quarterly Business Activity Statements (BAS) reporting GST collected and claimed back over the reporting period. The BAS may lead to a payment to the ATO if GST on receipts surpasses GST on payments, or a refund from the ATO if GST on payments exceeds GST on receipts.
Pay any net GST due to the ATO if the GST collected exceeds the GST credits for purchases made.
It's worth noting owners of commercial units registered for GST may be entitled to an input tax credit if their unit in the strata scheme is used for their business.
In conclusion, understanding and managing GST obligations is vital for the financial health and compliance of strata communities. With the guidance and expertise of Compass Strata, navigating these complexities becomes seamless and efficient. Our dedicated team is here to provide tailored solutions and support, ensuring that your strata community remains compliant and financially sustainable. Contact us today to learn more about how Compass Strata can help your community thrive.
