Is There GST On Residential Rent In Australia?

No. Australia does not apply any GST to residential rent. When you lease a residential property for someone to live in, the rent is an input-taxed supply, so no GST rate is added to it at all.

This is set out in the GST law and confirmed by the ATO. The ATO explains that if you rent out residential premises for residential accommodation, your rent is input taxed, which you can read in the ATO guidance on GST and residential property.

One point trips many landlords up: input-taxed is not the same as GST-free. Both mean no GST is charged on the supply, but they have very different consequences for the supplier. The next section explains the difference clearly.

What Does Input-Taxed Mean?

An input-taxed supply is a transaction where no GST is charged on the sale or rent, but the person making the supply also cannot claim GST credits on the expenses related to it.

This is different from a GST-free supply. With a GST-free supply, no GST is charged but the supplier can still claim back the GST included in their related costs. With an input-taxed supply, the supplier gets neither outcome: no GST is charged, and no GST credits can be claimed.

Residential rent sits firmly in the input-taxed category. So does the sale of existing residential property. This is why a residential landlord cannot recover the GST built into their maintenance bills, property management fees, or advertising costs.

What Counts As Residential Premises For GST?

Residential premises are defined in section 195-1 of the GST Act, and the ATO explains how the rules apply in ruling GSTR 2012/5. In short, premises are residential premises where they are occupied as a residence or for residential accommodation, or where they are intended to be occupied, and are capable of being occupied, as a residence.

A supply of residential premises can be a single room or apartment, or a larger complex made up of many rooms or apartments. The term of occupation does not change the outcome.

Physical Characteristics Test

The key test looks at the physical characteristics of the property. To be residential premises, the property must provide shelter and basic living facilities such as somewhere to sleep and eat. Premises without those physical characteristics are not residential premises to be used predominantly for residential accommodation.

Importantly, this test does not depend on the subjective intention of any particular occupier or on exactly how one person happens to use the space. It is about what the property is designed and built to do.

Residential Status When Used For Another Purpose

Because the test is about physical characteristics, a property keeps its residential status even when it is put to another use. The ATO gives the example of a house used as a business office: it still displays the physical characteristics of a residence, so it remains residential premises.

The reverse is also true. A building that does not have the physical characteristics of a residence is not residential premises even if someone is living in it. The classic example is a squatter living in a disused factory: the factory is still not residential premises for GST.

Vacant Land Is Not Residential Premises

Vacant land is not residential premises, even if a home could be built on it. To qualify as residential premises, land must either be lived in as a residence or be suitable for residential occupation. Because vacant land does not meet that test, transactions involving vacant land may be subject to GST where the seller is dealing with property as an enterprise and their turnover crosses the registration threshold. You can find a helpful overview of these property rules in this guide to property and GST.

What Input-Taxed Means For Landlords

The input-taxed status of residential rent has two practical effects, and both matter for your cash flow.

No GST On Rent Or Bonds

You do not add GST to the rent on a residential property. The ATO confirms that if you lease residential property, or receive a bond or security deposit for that property, you are not liable for GST on the rent you charge or on the bond or security you receive. Rent and bonds are simply not subject to GST.

No GST Credits On Rental Expenses

Because the rent is input-taxed, you cannot claim GST credits for anything you buy to lease the property. That includes repairs, property management fees, and advertising costs. The GST embedded in those bills becomes a real cost to you rather than something you can recover.

Example. A plumber sends a residential landlord an invoice for $1,100, made up of $1,000 plus $100 GST. A commercial landlord registered for GST could usually claim that $100 back. A residential landlord cannot. The full $1,100 is the actual cost, and only the income tax deduction (not a GST credit) is available.

Being Registered For GST Does Not Change This

Some landlords assume that registering for GST lets them charge GST on rent or claim credits on rental expenses. It does not. Even a landlord who is registered for GST still cannot add GST to residential rent and still cannot claim GST credits on residential rental expenses. The input-taxed treatment attaches to the supply itself, not to your registration status.

Do Landlords Need To Register For GST?

The general rule is that you must register for GST once your annual turnover reaches $75,000 or more. However, residential rent does not count towards that turnover test in the way many people fear.

If your only income is from residential rent, you are not required to register for GST even if that rent exceeds $75,000 a year. That is because residential rent is input-taxed, not a taxable supply.

The picture changes if you have other taxable business activities. If you earn income from short-term accommodation, commercial leasing, or another enterprise, you may need to register once your combined taxable turnover reaches the threshold. If you are unsure where you sit, this is exactly the kind of question worth checking before you lodge.

When GST Does Apply To Property

Residential rent is the clearest case of no GST, but property and GST do meet in several other situations. Here are the main ones where GST does apply.

Short-Term Accommodation Like Airbnb

Short-term accommodation, such as Airbnb stays or serviced apartments, is usually treated as a commercial supply and is subject to GST. The lease of commercial residential premises, including hotels, motels, inns, hostels, boarding houses, caravan parks, and camping grounds, is also subject to GST. How a boarding house or hostel is structured and operated can affect whether it is treated as residential or commercial, so these arrangements need to be looked at carefully.

Commercial Rent And Leases

Leasing commercial property, such as offices, warehouses, or retail outlets, is generally subject to GST. If you are registered, or required to be registered, for GST, you are liable for GST on the rent you charge on commercial premises, and you can generally claim GST credits on purchases that relate to renting it out, such as the GST in your managing agent’s fees. The ATO sets this out in its guidance on leasing and renting commercial premises.

A registered lessor charges GST at 10% on commercial rent and on outgoings billed to tenants, and usually lodges a business activity statement (BAS) each quarter. A tenant who is registered for GST may be able to claim GST credits for the GST included in their rent, provided both parties are registered or required to be registered. For more detail, this overview of GST and BAS obligations for commercial property lessors is useful.

Mixed-Use Properties

Some properties combine residential and commercial use, such as a shop on the ground floor with a residence above. In that case, only the commercial portion is subject to GST. Input tax credits may be partly claimable depending on how the property is used. Good practice is to keep the residential and commercial income separate so that the GST and BAS reporting on the commercial part is clean and defensible.

Can You Claim GST On Buying A Residential Property?

Generally, no. Buying an existing, previously occupied residential property is an input-taxed supply. That means no GST is charged on the sale and you cannot claim a GST credit on the purchase price. Buying and selling second hand residential property is usually outside the GST net entirely. You can read a plain explanation of this in this guide to GST on property.

What Is New Residential Property?

New residential property is treated differently. A property is generally new where it has not previously been sold as residential premises, where it has been substantially renovated, or where new buildings have replaced demolished ones on the same site. GST generally applies to the sale of new residential property.

GST Withholding At Settlement

For contracts signed after 1 July 2018, buyers of new residential premises or potential residential land must withhold an amount from the contract price and pay it directly to the ATO at settlement. The withholding is typically one eleventh of the contract price for a fully taxable supply, or 7% of the contract price where the margin scheme applies.

Developers Changing From Selling To Leasing

Developers face extra complexity. If a developer originally intends to sell new residential premises, which is a taxable supply, but later decides to lease them instead, which is input-taxed, the change in intended use can trigger GST adjustments. Developers who build both commercial and residential property must also apportion their GST credits based on the expected use of each part. This is an area where getting the documentation right from the start saves a great deal of trouble later.

GST Versus Income Tax On Rental Income

It is easy to confuse GST and income tax, but they are separate systems. The fact that there is no GST on residential rent does not mean the rent is tax-free.

Your residential rental income is still assessable for income tax, and you can still claim income tax deductions for many rental expenses, such as the cost of management, maintenance, and loan interest. The difference is that those costs give you an income tax deduction rather than a GST credit. From 1 July 2027 negative gearing on residential property is limited to new builds, with properties held at 7:30pm AEST on 12 May 2026 exempt; that change is now law.

Working out which expenses are deductible, how to treat depreciating assets, and how the eventual sale is taxed can quickly become detailed. If your situation involves more than a single straightforward residential property, it is worth getting tailored advice so nothing is missed.

Frequently Asked Questions

Do you pay GST on residential rent?
No. Residential rent is input-taxed, so no GST is charged on it.

Does residential rent include GST?
No. The rent figure does not include any GST, because residential rent is input-taxed.

Do I have to register for GST if I earn over $75,000 from rent only?
No. If your only income is from residential rent, you do not have to register for GST even if the rent is $75,000 or more, because that rent is input-taxed. You may need to register if you also have other taxable business activities.

Can I claim GST on buying a residential property?
Generally no, where you are buying an existing residential property. That sale is input-taxed, so there is no GST to claim. GST treatment is different for new residential property.

Are bonds and security deposits subject to GST?
No. The ATO confirms that rent and bonds on residential property are not subject to GST.

Get Help With GST And Your Rental Property

The short answer is reassuringly simple: there is no GST on residential rent in Australia because it is an input-taxed supply. You do not charge GST on the rent or on a bond, and you cannot claim GST credits on the related expenses, regardless of whether you are registered for GST.

Where it gets more involved is around the edges: mixed-use buildings, short-term accommodation, commercial leases, buying new property, and developers changing their plans. In those situations the GST consequences can be significant, and a small mistake can be expensive.

If you own or are buying rental property and want certainty about your GST and income tax position, the team at Tax Window can review your specific situation and explain exactly what applies to you in plain language.

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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Is There GST On Residential Rent In Australia?