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GST exempt supplies

Unlike taxable supplies (including zero-rated supplies), exempt supplies are goods and services which are not subject to GST and not included in the GST return.

The following items are exempt supplies: 

1. Donated goods and services sold by non-profit bodies

If a non-profit body has received donated goods or services and later sells them, it cannot charge GST on the sale of these donated goods and services. A GST credit cannot be claimed for expenses involved in supplying donated goods and services either.

2. Financial services

Generally, the supply of financial service is exempt. The following are exempt from GST:

  • paying or collecting any amount of interest
  • mortgages and other loans
  • bank fees
  • securities such as stocks and shares
  • exchanging currency (for example, changing US$ into NZ$)
  • arranging or agreeing to do any of the above (for example, mortgage broking)

The full definition of financial service can be found in s 3 GSTA.

3. Rent and lease of residential accommodation

GST cannot be charged on the rent for a residential dwelling. A landlord can't claim any GST on dwelling expenses, such as maintenance, rates and insurance.

However, this exemption applies only to residential accommodation, not to commercial accommodation. Commercial dwellings are defined in s 2 of the GSTA.

4. Sale of residential accommodation

If a registered person has used a dwelling exclusively for residential rental accommodation for a period of at least five years, the sale of that dwelling is exempt from GST if made in the course or furtherance of a taxable activity. The exemption includes the land on which the dwelling was erected.

The vendor must satisfy all the following criteria for a supply to be exempt under s 14(1)(d):

  • The supply must be by way of sale;
  • The supply must be by a registered person in the course of a taxable activity. A person will usually have a taxable activity of selling residential properties if that person sells properties continuously or regularly;
  • The property must have been used for residential, rather than commercial purposes;
  • The property must have been used for exclusively for rental purposes;
  • The vendor must have rented out the property for at least five years

5. Fine metals

The supply of fine metal is exempt from GST (s 14(1)(e)), unless it is a supply of new fine metal, that is zero-rated under s 11(1).

Fine metal is any form of:

  • gold with a fineness of not less than 99.5%
  • silver with a fineness of not less than 99.9%
  • platinum with a fineness of not less than 99%.

6. Penalty interest

Interest charged on overdue accounts is treated as an exempt supply.


If you sell goods to another supplier on a 30, 60 or 90 day account basis and that account becomes overdue, any penalty interest chargeable on the non-payment should not be included in your GST return.

Fines and penalties imposed for an offence created by statute are not subject to GST.


Parking penalties imposed by the court as fines or by local authorities as infringement fees are punishments for offences against the Transport Act 1962. These are not liable for GST.