The Retirement Villages Regulation 2009, which commenced on 1 March 2010, included provisions to clarify when payroll tax costs can be funded from recurrent charges. Clause 26(d) of the Regulation provides that recurrent charges cannot be used to fund payroll tax unless:
- the wages paid to operate an individual village are more than the threshold amount set by the Payroll Tax Act 2007; or
- the residents of a village have previously consented to finance payroll tax from recurrent charges and they continue to give such consent.
If the village wages are below the threshold, but payroll tax has been included in an approved budget prior to 1 March 2010, the operator can propose that payroll tax be included in a subsequent budget and it is up to the residents whether or not to consent to including the charge in the budget.
Section 115 of the Retirement Villages Act 1999 provides that, if the residents do not agree to the proposed budget, the operator or a resident may apply to the NSW Civil and Administrative Tribunal (NCAT) for an order in respect of the proposed expenditure. The Tribunal is required to make its decision on each application based on the evidence provided.
There is no power under the act for NSW Fair Trading to make a binding ‘ruling’ about the meaning of clause 26 of the Regulation, or any other matter under the act. Any statement by NSW Fair Trading on the meaning of clause 26 would not prevent the parties to a dispute from exercising their right to apply to the Tribunal.
Any questions regarding how payroll tax is calculated should be directed to Revenue NSW.