Unravelling the Truth Behind Commercial Bonds in NSW

By Ashlea Skupien


Do commercial bonds incur Goods and Services Tax (GST)?


Understanding the tax implications of these essential financial instruments is crucial for Commercial Property Managers, Landlords and Tenants operating within New South Wales (NSW).


Contrary to many financial transactions that fall under the GST framework, commercial bonds in NSW enjoy a unique status—they are GST-free.


Commercial bonds, serving as security deposits within lease agreements, are specifically designed to safeguard against potential breaches rather than constituting payments for goods or services.


This exemption holds significant implications for the financial landscape. The absence of GST in commercial bonds simplifies lease agreements, providing a transparent and efficient environment for both landlords and tenants.