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Thursday, 16 March 2000
Page: 14906


Mr CREAN (3:17 PM) —My question is to the Minister for Aged Care. Can you confirm that elderly people living in retirement villages who own their units will be forced to pay GST on maintenance fees and 24-hour emergency services, but those who rent will not? What is fair and simple about a tax that hits one person living in a retirement village but gives a GST concession to their next-door neighbour?


Mr COSTELLO (Treasurer) —I am very happy to answer questions about tax and the rules which apply—



Mr SPEAKER —The Treasurer will resume his seat. The member for Burke will excuse himself once again from the House under 304A.

The member for Burke then withdrew from the chamber.


Mr COSTELLO —I am very happy to answer questions on tax which are within the area of responsibility of Treasury. I make the point that in relation to retirement villages—that is, in relation to those people who own their homes and where they are purchasing services—those services are subject to GST. In relation to those people who rent their villas or units or whatever they may be, the maintenance fees which are charged are input taxed and are worked into the rent in exactly the same way as they would be in relation to residential rents. This question, of course, arises from an article in today's Herald Sun by Clinton Porteous. I would echo the words of Deputy Commissioner Rick Matthews who said:

Residents of retirement villages were being treated the same as everyone else. Rents were input taxed but people who owned their own home had to pay GST to maintain their property. The treatment is equal.

Those rules which apply generally apply in relation to retirement villages because they apply on the same basis of ownership or residential rents.