In the transition to the New Tax System, will real estate management fees for residential property be GST-free until 1 July 2005 if signed before 2 December 1998, while fees for commercial properties will be GST-free until 1 July 2005 if signed before 8 July 1999; if so, why.

Where the recipient of real estate management services is not entitled to full input tax credits, the fees are GST-free until the earliest of a review opportunity (as defined) or 1 July 2005, provided the supply of the services is under a written agreement signed before 2 December 1998 which identifies the supply and consideration for the supply.

This provision takes effect from the date of the introduction of the legislation into the Parliament, so as to minimise any behavioural changes in order to take advantage of GST-free status.

Where the recipient of real estate management services is entitled to full input tax credits, the fees are GST-free until the earliest of a review opportunity (as defined) or 1 July 2005, provided the supply of the services is under a written agreement signed before 8 July 1999 which identifies the supply and consideration for the supply.

This provision takes effect from the date of Royal Assent reflecting the often more drawn-out nature of the commercial negotiations involved and the relatively low incentive to change behaviour.