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Residents still riled by park rent GST

GST levied on caravan parks still rankles the caravan industry, but there is no immediate solution in sight.

Long-term residents of any caravan park with a tourist component to its income – about 95 per cent of caravan parks with long-term residents have a tourist component – must pay 5.5 per cent GST on their park rents.

These residents are understandably upset about the GST impost, and this poses a risk for both major parties.

Because park residents are clumped together, they can create voting blocs big enough to effect a seat.

Simply removing the GST from caravan parks, as Federal Opposition leader Kim Beazley suggested, will not solve the problem.

In fact, it will probably cause caravan park rents to rise by between 6 per cent and 8 per cent.

Removing the GST from caravan park rents will remove the ability for caravan park owners to claim GST input credits for park maintenance, which is considerable.

The move to introduce GST on caravan park rents hurt many WA park operators.

State licensing laws only allow park operators to increase their rents once a year – and then only after several months warning.

Many WA park owners had lifted their rates in January and were forced to absorb the GST until January this year.

The Caravan Industry Association’s Norton Whitmont said caravan park tenants felt discriminated against.

“If they were living in the suburbs, they would not be subjected to GST on their rent,” Mr Whitmont said.

“But in a suburban rental situation the amount of GST input credits the landlord would claim would be small. In a park situation, the GST credits are quite high. There’s maintenance on roads, swimming pools, shower blocks and gardens.

“The government says it can’t give park residents relief. The Labor Party is taking the populist view and saying it will roll back GST. That will be a disaster. In the short-term, the compliance costs will be huge.”

Mr Whitmont said park owners’ associations throughout Australia were trying to find ways to reduce the GST on rents without having to raise their compliance costs.

“We hope to have a plan up in the next few months,” he said.

Fallon Group partner Tony Ince said caravan parks fell into the GST grey area between short-term and permanent accommodation.

“Unfortunately, a lot of low-income earners are living in caravan parks,” Mr Ince said.

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