21HB Transitional rules related to treatment of dwellings

(1)

Subsections (2) and (3) apply when goods or services acquired or produced in the period between 1 October 1986 and 1 April 2011 were not acquired or produced for the principal purpose of making taxable supplies but, because of the changes made by section 4(3) and (4) of the Taxation (GST and Remedial Matters) Act 2010 to the definitions of commercial dwelling and dwelling, the goods or services are treated from 1 April 2011 as being used for making taxable supplies. For the purposes of this section, the person must be a person registered under section 51(1) before or after 1 April 2011.

(2)

Input tax in relation to the acquisition referred to in subsection (3) may be deducted under section 20(3C) to the extent to which a deduction has not been made under the old apportionment rules.

(3)

The person must treat the goods or services as acquired on 1 April 2011 at the original cost of the supply.

(4)

A person may choose that a supply of accommodation in premises not be a taxable supply if the premises—

(a)

met the requirements of the definition of dwelling immediately before section 4(3) and (4) of the Taxation (GST and Remedial Matters) Act 2010 amended the definitions of commercial dwelling and dwelling; and

(b)

do not meet the requirements of the definition of dwelling because of the amendments referred to in paragraph (a).

(5)

Subsection (4) does not apply if the value of the person’s supplies of accommodation in premises affected by the amendments exceeds the threshold value given by section 51(1)(a).

(6)

Subsection (7) applies to a person who—

(a)

is required to treat a dwelling as a commercial dwelling because of the amendments to the definitions of commercial dwelling and dwelling made by section 4(3) and (4) of the Taxation (GST and Remedial Matters) Act 2010; and

(b)

on or after 1 April 2011, has treated the supply of accommodation in a dwelling, being a residential unit in a retirement village or rest home, as a taxable supply.

(7)

The person may irrevocably choose in a tax return for a period starting before 1 April 2015, to—

(a)

continue to treat the supply as a taxable supply for that period and for subsequent periods; or

(b)

treat the supply as an exempt supply for that period and for subsequent periods, and for this purpose, the election to treat the supply as an exempt supply does not constitute a change of use for the purposes of section 21FB(4).

Section 21HB: inserted (with effect on 1 April 2011), on 29 August 2011 (applying to supplies made on or after 1 April 2011), by section 241(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section 21HB heading: amended, on 30 June 2014, by section 192(1) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).

Section 21HB(1): amended, on 30 June 2014 (applying to a tax position taken by a person after 22 November 2013), by section 192(2)(a) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).

Section 21HB(1): amended, on 30 June 2014 (applying to a tax position taken by a person after 22 November 2013), by section 192(2)(b) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).

Section 21HB(4): replaced (with effect on 1 April 2011), on 24 February 2016, by section 278 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section 21HB(5): replaced (with effect on 1 April 2011), on 24 February 2016, by section 278 of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).

Section 21HB(6): inserted, on 1 April 2015 (applying to supplies of accommodation in dwellings affected by the amendments that are acquired before that date), by section 192(4) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).

Section 21HB(7): inserted, on 1 April 2015 (applying to supplies of accommodation in dwellings affected by the amendments that are acquired before that date), by section 192(4) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).