How are commercial lease incentives and inducements affected by the GST?
If a landlord provides a free fit-out (eg provides the premises with furnishings etc) there is no additional GST liability. The landlord would be charged GST by the fit-out contractor and would generally be able to claim an input tax credit for this GST. The landlord does not have to pay any GST on the provision of the fit-out to the tenant provided that no other consideration is made. Rent-free periods are not subject to GST. Cash incentives to enter a lease, or end a lease early, are subject to GST.
