Changes to excluded retail premises

The Retail Leases Act 2003 excludes from the definition of “retail premises” premises in respect of which the “occupancy costs” under the lease is more than the amount prescribed by the regulations. See: s.4(2)(a). Before 22 April 2013 the amount prescribed by the regulations was $1,000,000 per annum. From 22 April 2013 the amount prescribed is $1,000,000 per annum “exclusive of GST”. See: regulation 6 in the Retail Leases Regulations 2013. The effect of the change will be to bring more premises within the definition of “retail premises”.

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  1. #1 by Lou Guzzardi on August 16, 2013 - 4:45 pm

    I am not sure how the “clarification” to this regulation operates. The RIS makes its clear there is to be “no change” to the current threshold and is mereley clarifying some confusion that practioners may have had with whether the $1m amount includes GST or not. So if there no change I assume that occupancy costs as determined under s 4 (3) still includes GST as there has not be any change to the definition of outgoings (which include GST)
    One interpretation of the inclusion of the words “exclusive of GST” could be that GST is now excluded from the calculation of occupancy costs which effectively lifts the bar to something greater than $1m. My question may be best explained by way of example: If the rent payable is $950,000 + GST (excluding any other outgoings), is the the lease a retail premises lease because the figure to be used is $950,000 or is it not a retail premises lease because the occupancy costs are (still) $1,045,000?

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