GST On Accommodation In Australia: Rates Explained

/ Goods and Services Tax (GST) / By

Updated for the 2026–27 financial year

Short term commercial accommodation is generally subject to GST at the standard 10% rate, and the GST included in a price is one-eleventh of the amount charged. Some tourism supplies can be GST free, particularly when they are supplied to non-residents or used outside Australia, and long term stays of 28 continuous days or more can attract a concessional treatment that effectively reduces the GST you pay. This guide explains how it all works for accommodation and tourism operators, and for business travellers who want to claim GST credits on a stay.

GST for Accommodation and Tourism Operators What Every Aussie Business Needs to Know

Contents

Does GST Apply To Accommodation In Australia?

Yes. Short term commercial accommodation is generally subject to GST at the standard 10% rate. Hotels, motels and serviced apartments charge GST, operators must issue tax invoices, and the GST must be included in advertised prices.

There are two main situations where the picture changes. First, some tourism services are GST free, particularly when they are supplied to non-residents or used outside Australia. Second, long term stays of 28 continuous days or more can qualify for a concessional treatment that reduces the GST charged. We work through both below.

Whether you are running a boutique hotel in Byron Bay, managing a caravan park in the outback, or offering eco tours in Tasmania, getting GST right affects your pricing, your invoicing and your compliance. Understanding the rules helps you avoid costly mistakes and price your rooms correctly.

What Is GST And How Does It Work?

GST, or Goods and Services Tax, is a 10% tax applied to most goods and services sold in Australia. If you are registered for GST, you add it to the price of your taxable sales, you can claim back the GST included in your business purchases (called input tax credits), and you report the difference to the ATO through your Business Activity Statement, known as the BAS.

In practical terms, you collect GST on your sales, deduct the GST you paid on your costs, and pay the net amount to the ATO. If the GST on your purchases is higher than the GST on your sales, you may receive a refund. This is the backbone of how every registered accommodation and tourism business handles the tax.

How To Calculate The GST In An Accommodation Price

For short term commercial accommodation, GST applies at the rate of one-eleventh of the price you charge. Short term means guests stay for less than 28 continuous days. To work out the GST already inside a GST inclusive price, divide that price by 11.

Worked example: A hotel charges $220 a night including GST. That is $200 plus GST at 10%. The GST portion is one-eleventh of $220, which is $20. The room rate excluding GST is $200.

If you lease commercial residential property to someone who runs their own accommodation business, you are also liable to pay GST at one-eleventh of the rent you receive. You can read more in the ATO guidance on commercial residential property.

Short Term Versus Long Term Accommodation

The length of a guest’s stay changes how GST applies. The dividing line is 28 continuous days.

  • Short term accommodation is a stay of fewer than 28 continuous days. It is always taxed at the full 10% GST and no concession applies.
  • Long term accommodation is commercial accommodation provided to an individual for a continuous period of 28 days or more. This can qualify for a concessional treatment.

The Concessional GST Rate For Long Term Stays

Division 87 of the GST law provides a concession for long term commercial accommodation. Under this concession, the provider can choose to charge GST on only 50% of the value of the supply. Because GST is 10% of half the price, this works out to an effective rate of about 5.5% of the tariff, and the provider can still claim input tax credits on the costs of providing that accommodation.

The concessional GST is calculated on half of the normal GST inclusive price of the accommodation. The chosen method affects your sales only; there is no change to how you account for GST on your purchases. For the detail behind the concession, the KP Accounting overview of GST on accommodation sets out the mechanics clearly.

When A Property Is Predominantly Long Term

How the concession applies depends on whether your premises are predominantly long term. Premises are predominantly long term when at least 70% of guests stay 28 days or more.

  • Where premises are predominantly long term (at least 70% of guests staying 28 days or more), the concession applies to the whole of each long term stay, including the first 27 days.
  • Where fewer than 70% of guests are long term, the concession applies only from the 28th day onwards. The first 27 days are taxed at the full 10%.

Worked Example: Long Term Accommodation GST

Day 28 example (not predominantly long term): A hotel usually charges $220 a night including GST ($200 plus 10% GST). It charges the full $220 for the first 27 days. From day 28, half of $220 is $110. GST on that is $11 (10% of $110). Added to the $200 GST exclusive charge, the new price is $211 a night.

Predominantly long term example: A motel with a standard short term rate of $66 a night ($60 plus $6 GST) that mainly provides long term accommodation halves the $66 to $33, calculates 10% of $33 ($3.30), and charges long term occupants $63.30 a night ($60 plus $3.30 GST) from the beginning of their stay.

The Input Taxed Option

Instead of the concessional treatment, an operator can choose to treat long term accommodation as input taxed. This means you do not charge GST on the accommodation at all. The trade off is that you cannot claim GST credits on the purchases related to providing that accommodation.

Whichever method you choose, you must apply it consistently for at least 12 months. Under the input taxed option you report the amount for all long term accommodation at label G1 Total sales, and at label G4 Input-taxed sales if you use the calculation worksheet method.

What Counts As Commercial Residential Premises?

The long term concession only applies where the premises qualify as commercial residential premises. The question of when premises are commercial residential premises is considered in Goods and Services Tax Ruling GSTR 2012/6, and the related ruling on residential premises is GSTR 2012/5.

Premises that can qualify include hotels, motels, inns, hostels and boarding houses, school and student accommodation, caravan parks and camping grounds, marinas with residential berths, ships let for hire, and aged care and retirement village style residences. The common characteristics are:

  • The premises are operated on a commercial basis.
  • They have the capacity to accommodate several unrelated guests at once.
  • Accommodation is offered to the public.
  • There is central management.
  • Occupants have the status of guests.

GST For Caravan Parks And Camping Grounds

Caravan parks and camping grounds are commercial residential premises for GST purposes. Where they provide facilities for long term residential purposes, the long term accommodation concessions may apply in the same way as for hotels and motels.

Otherwise, short term bookings are fully taxable at the standard 10% rate. As with other operators, you should track how long guests stay so you apply the right treatment and meet the 28 day and 70% tests where relevant.

GST On Package Deals, Meals And Activities

Tourism businesses often bundle accommodation with meals, activities and other extras. For a package such as a room plus breakfast, the entire amount is typically subject to GST unless individual components are GST free.

Where the long term concession applies, it covers both the accommodation and incidental supplies that form part of the tariff, such as electricity, gas, air conditioning or heating, cleaning and maintenance, and phone, wifi, television and radio. These follow the accommodation treatment.

However, separately charged services do not. If you charge separately for items such as phone calls, mini-bar items, meals, personal laundry or in-house entertainment, you must charge GST on those at the normal 10% rate.

Are International Flights And Overseas Travel GST Free?

Some tourism services are GST free, particularly when supplied to non-residents or used outside Australia. This can include booking services for overseas travel and tours that take place overseas.

Proof is often required to justify GST free status. This can include travel documents or overseas billing addresses. Because the rules here depend on the precise nature of the supply and the customer, it is worth confirming the treatment of any international service before you decide not to charge GST on it.

Gift Vouchers And Travel Credits

Gift vouchers and travel credits have their own rules. As a general guide, GST on a voucher for a specific service is usually triggered when the voucher is redeemed and the service is delivered. For a monetary voucher that can be used for a range of things, GST generally arises when the underlying service is actually delivered rather than when the voucher is sold. Because the treatment depends on the type of voucher, it is wise to confirm how yours should be handled.

When Does A Tourism Business Need To Register For GST?

You must register for GST when your business has a GST turnover of $75,000 or more. GST turnover is your gross business income minus GST, not your profit. For non-profit organisations the threshold is $150,000 or more.

You reach the threshold if your current GST turnover (the current month plus the previous 11 months) totals $75,000 or more, or if your projected GST turnover (the current month plus the next 11 months) is likely to be $75,000 or more. Even if your current turnover is at or above the threshold, you do not have to register if your projected turnover will be below it.

A few key practical points from the ATO guidance on registering for GST:

  • You need an Australian business number (ABN) before you register.
  • Once you are required to register, you must do so within 21 days of exceeding the threshold.
  • You only need to register once, even if you operate more than one business.
  • You can register through Online services for business, by phone on 13 28 66, or through a registered tax or BAS agent.
  • If you do not register when required, you may have to pay GST on sales made since the date you were required to register, even if you did not include GST in the price, plus penalties and interest.

Do Sole Traders And Small Operators Need To Register?

The same $75,000 threshold applies to sole traders and small accommodation or tour operators. Below the threshold, registration is optional. If you choose to register voluntarily, you generally must stay registered for at least 12 months.

If you are not registered, check each month to see whether you have reached the threshold or are likely to exceed it, so you can register within the 21 day window when the time comes.

Reporting And Record Keeping Obligations

Once registered, you need to:

  • Charge GST on your taxable supplies.
  • Issue tax invoices.
  • Lodge a Business Activity Statement (BAS).
  • Keep proper records, including tax invoices.
  • Pay the GST you collect to the ATO.

On the BAS, short term accommodation GST is reported at label 1A (GST on sales) and label 1B (GST on purchases). Accurate records make this straightforward and protect you if the ATO reviews your figures.

Can A Business Claim GST Credits On A Hotel Bill?

Yes. A GST registered business can claim GST credits on accommodation used for business purposes, provided it holds a valid tax invoice. This is one reason the tax invoice you issue as an operator matters to your business guests.

GST On Bookings Through Booking.com And Offshore Sellers

From 1 July 2019, offshore sellers of Australian hotel accommodation must calculate their GST turnover in the same way as local sellers. Previously these offshore sellers were exempt from including sales of Australian hotel accommodation in their GST turnover. The change came through the Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Act 2019, first announced in the 2018 budget.

This means offshore sellers must add GST once their Australian-based sales exceed $75,000 in a 12-month period. The practical benefit is that businesses booking accommodation through offshore sellers can now obtain a tax invoice and claim GST credits. When you purchase through an offshore agent, you will generally pay the hotel provider directly, and the hotel provider will charge you GST and provide a tax invoice. You can read more about this change in the coverage from the Public Accountant and Accountants Daily.

The types of accommodation affected include hotels, motels and hostels, serviced apartments, student accommodation, caravan and tourist parks, house boat hire or cruise operators, and bed and breakfast accommodation. The change does not affect offshore agents that organise Australian accommodation on behalf of domestic accommodation providers.

Common GST Mistakes Accommodation And Tourism Operators Make

Many operators unintentionally underpay GST or get the treatment wrong. The common pitfalls include:

  • Not registering for GST within the 21 day window after exceeding the threshold, which can lead to back-paid GST, penalties and interest.
  • Failing to apply the chosen long term method consistently for 12 months.
  • Treating separately charged services such as meals, mini-bar items or laundry as concessional, when they carry the full 10% GST.
  • Misclassifying long term stays, or failing to track the 28 day and 70% tests.
  • Missing or incomplete tax invoices, which can cost your business guests their GST credits.

Frequently Asked Questions

Is there GST on accommodation in Australia? Yes. Short term commercial accommodation is generally subject to GST at the standard 10% rate.

What is the concessional GST rate for long term stays? Under the long term concession, GST is charged on only 50% of the value of the supply, which is an effective rate of about 5.5% of the tariff, while the provider can still claim input tax credits.

How many nights counts as long term accommodation? Long term accommodation is a continuous stay of 28 days or more. A stay of fewer than 28 days is always taxed at the full 10%.

Can a business claim GST on a hotel stay? Yes, a GST registered business can claim GST credits on accommodation used for business, provided it holds a valid tax invoice.

Does Booking.com charge GST? Since 1 July 2019, offshore sellers of Australian accommodation must include those sales in their GST turnover and charge GST once Australian-based sales exceed $75,000 in a 12-month period, which means you can obtain a tax invoice and claim credits.

Get Your Accommodation Or Tourism GST Right

GST in the accommodation and tourism sector comes down to a few core ideas. Short term stays carry the full 10% GST, and the GST inside a price is one-eleventh of the amount charged. Long term stays of 28 continuous days or more can attract a concession that effectively halves the GST, provided the premises are commercial residential premises and you apply your chosen method consistently for 12 months. Some international tourism supplies are GST free, separately charged extras carry the full rate, and registration kicks in at $75,000 of turnover with a 21 day window to act.

Get these settings right and your pricing, invoicing and BAS reporting all fall into place. If your situation involves a mix of short and long term guests, bundled packages, offshore booking platforms or international clients, a quick conversation can confirm the correct treatment and save you from back-paid GST, penalties and interest. If you would like tailored advice for your accommodation or tourism business, we are here to help.

Artur Osadchiy

About The Author: Artur Osadchiy

Artur is a Certified Practising Accountant with over 30 years’ experience working as a trusted advisor to 600+ clients across Australia. Based in Melbourne, he started Tax Window with his wife Marina in 2009 and leads the firm’s tax and accounting team. In his free time, Artur enjoys watching the AFL (go Kangas!) and spending time with family.

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