New Zealand: Draft guidance on application of reduced value rule for GST on long-stay accommodations in commercial dwellings
The consultation closes May 29, 2026.
The Inland Revenue Department (IRD) released an exposure draft interpretation statement in April 2026 on the application of the reduced value rule for goods and services tax (GST) on long‑stay accommodations in commercial dwellings.
The draft explains the operation of section 10(6) of the GST Act, under which the value of domestic goods and services supplied in a commercial dwelling for more than four weeks is reduced to 60%, resulting in an effective GST rate of 9% on that component of the supply.
The interpretation details when the reduced rate applies depending on the nature of the commercial dwelling, whether it qualifies as a residential establishment, and whether there is upfront agreement for occupation exceeding four weeks.
The consultation closes May 29, 2026.
For more information, contact a KPMG tax professional in New Zealand:
Peter Scott | pcscott@kpmg.co.nz