Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-10 - CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE  

Division 43 - Deductions for capital works  

Subdivision 43-E - Special rules about uses  

Operative provisions

SECTION 43-180   Special rules for hotel and apartment buildings  
Rules about counting rooms or apartments etc.

43-180(1)    
A bedroom in a ^* hotel building, or an apartment, unit or flat in an ^* apartment building, is taken to be used or available for use wholly for short-term accommodation for travellers in a period if it is used or available for use mainly for short-term accommodation for travellers in that period.

Note:

This subsection ensures that a limited period of non-short-term traveller accommodation use will be disregarded in counting the number of rooms provided the bedroom, apartment, unit or flat is used mainly for short-term traveller accommodation.

43-180(2)    
For the purpose of counting the number of bedrooms in a ^* hotel building, if 2 or more rooms that are bedrooms or include a bedroom are for use together as a suite of rooms, the suite is taken to constitute one bedroom.

43-180(3)    
Despite subsection 43-50(3) (which treats you as not being the owner of certain capital works), you can still count an apartment, unit or flat in relation to which CGT event F2 has happened in working out whether you own or lease at least 10 apartments, units or flats in an ^* apartment building if you own or lease at least one other apartment, unit or flat in the building.

Note 1:

CGT event F2 results in a lease with a term of 50 years or more being treated for CGT purposes more like an outright disposal.

Note 2:

Subsection 43-50(3) treats you as not being the owner of capital works that are the subject of such a lease.

Rules about hotel or apartment complexes

43-180(4)    
A group of buildings that constitutes a complex of buildings is taken to be one ^* hotel building or ^* apartment building, and none of the buildings in the group is taken to be a separate building.

43-180(5)    
The construction of a ^* hotel building or ^* apartment building is taken to be an extension of another building if, after completion of the construction, those buildings are taken to be one building under subsection (4).

Note:

Subsections (4) and (5) ensure that a hotel or apartment building that provides short-term traveller accommodation in detached buildings will be treated as a single building so that the 10 hotel room/apartment test is applied to the complex as a whole. It also has the effect that the complex as a whole must be completed before there can be a construction expenditure area.

Rules about facilities not commonly provided in Australia

43-180(6)    
If a ^* hotel building contains a facility of a kind that is not commonly provided in a hotel, motel or guest house in Australia, the facility is taken not to be used or for use to operate a hotel, motel or guest house.

43-180(7)    
If an ^* apartment building contains a facility of a kind that is not commonly provided in a hotel, motel or guest house in Australia, the facility is taken not to be a facility for use in association with providing short-term accommodation for travellers in apartments, units or flats.

Note:

Subsections (6) and (7) exclude areas such as casinos from the construction expenditure area of a hotel building or apartment building.