The ACCC is concerned some charitable institutions which run retirement villages may be confused about how to calculate whether the Goods and Services Tax is payable on residents' maintenance fees, Acting ACCC Chairman, Mr Allan Asher, said today.
"The issue of whether residents of a charitable institution retirement village are required to pay GST depends on the specific financial circumstances of the village. The Australian Taxation Office has issued a publication entitled "GST Guidelines: Retirement Villages and Maintenance Fees" to assist retirement village managers in working out whether GST liability applies to maintenance fees at their villages. Each village should follow these guidelines in determining these issues".
The Stewards' Foundation of Christian Brethren recently charged residents of three retirement villages GST on maintenance fees. A resident of one village complained to the ACCC.
On investigation it became apparent that the Stewards' Foundation of Christian Brethren was unaware of the ATO guidelines. The ACCC provided the Foundation with a copy of the guidelines which it promptly followed. As a result the Foundation determined that for each of the three villages under its control, GST was not payable on maintenance fees. The Foundation has since refunded money that it collected from residents for GST and written to each to apologise for any concern caused.
"The ACCC is concerned that there may be other retirement villages run by charitable institutions which have imposed GST on maintenance fees despite the fact that in some cases GST should not be imposed. Unless steps are taken by retirement villages operated by charitable institutions to review the initial decision to apply GST on maintenance fees, residents will continue paying GST on such fees for an indefinite period in circumstances where there may be no GST liability.
"Accordingly, the ACCC is calling on all managers of retirement villages run by charitable institutions to urgently review their decisions to impose GST on maintenance fees. In particular the ACCC would recommend that retirement village managers fully consider the ATO's Guidelines on this issue and also seek professional advice.
"The ACCC would recommend that residents of retirement villages of charitable institutions who are concerned about the basis on which GST has been charged on their maintenance fees, should discuss the matter with their manager in the first instance. In the absence of a satisfactory response retirement village residents are encouraged to contact the ACCC Price Hotline on 1300 302 502".