TDS 22/19: Whether weathertightness payments by the Crown are subject to GST

If you’ve suffered weathertightness issues, you may be eligible for remedial payments.

As a result of the FAP agreement, the MBIE and council agreed to pay 25% of remedial costs to those suffering from weathertightness issues that the council is responsible for. The question has arisen whether these payments of 25% are a grant or subsidy and therefore subject to GST under S 8 of the GSTA.

Are these weathertightness remedial payments subject to GST?

The payments have been deemed by the TCO to be in the nature of a grant or subsidy. This is because they have been made with the purpose of assisting with the costs of repairs and for public interest, not because there is a duty on the council. As grants and subsidies are subject to GST, weathertightness payments will be subject to GST in NZ.

If you require further assistance, please contact us through the form below.

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