Ebrahimi v Chief Commissioner of State Revenue [2022] NSWCATAD 303
Background
The Applicant purchased a vacant block of land in East Ryde in April 2017. He applied for and was granted the land tax concession applying to an owner’s intended principal place of residence (“PPR”) in 2018. However, he was unable to proceed with the planned construction and eventually sold the Property in August 2020.
After the land was sold the Chief Commissioner determined that the Applicant was not entitled to the intended PPR concession, and issued land tax assessments for the 2018 to 2020 land tax years.
The Applicant’s Objection to the land tax assessments was unsuccessful and he then applied to the Tribunal for administrative review of those assessments.
The Statutory Framework
Under s. 7 of the Land Tax Management Act, land tax is payable on all land in NSW, unless it is exempt. The person charged with the tax is the person who is the owner at midnight on 31 December immediately before each year: s 8.
A person’s PPR is exempt from land tax: s 10(1)(r) and Schedule 1A. To attract this exemption the land must be ‘used and occupied by the owner as the PPR of the owner of the land, and for no other purpose’: Schedule 1A, cl 2(1).
Under cl 6 of Schedule 1A, a person who is not entitled to claim the PPR exemption but owns unoccupied land can claim it as their PPR if they intend to use it as such. This concession is only available for the four land tax years immediately following the year in which the person became the owner of the land: cl 6(3). If the owner does not actually use and occupy the land as their PPR within that 4-year period, the concession is revoked and the exemption is taken not to have applied for any of the 4 years: cl 6(5) and (6).
Submissions
Applicant's Submissions
The Applicant contended that it was always his intention to use the Property as his PPR. He undertook significant preparatory work at considerable expense to enable the construction of the residence. He was prevented from fulfilling his intention because of the impact of the COVID-19 pandemic and his inability to secure sufficient construction finance.
He submitted that he has lived in Australia for 30 years and has always complied with the law. He claimed he was not informed of the four-year limit on the clause 6 concession and noted the leniency extended during the pandemic to those with mortgages, and those in rental accommodation. He requested that the land tax be waived.
Chief Commissioner's Submissions
The Chief Commissioner submitted that the requirements of clause 6 had not been met, and there is no scope to take into account any reason for a person’s failure to comply with the requirements. Nor is there a discretion to waive the requirements and grant an exemption when the requirements have not been met. The concession must therefore be revoked.
Decision
The Tribunal concluded that the legislation is clear that when a person who owns unoccupied land but intends to use and occupy it as their PPR, they will get the benefit of the concession in clause 6. However, the concession is provisional and is revoked if the owner fails to actually use and occupy the land for that purpose within the four year period set out in cl 6(3)(a).
The Tribunal determined that neither the Chief Commissioner nor the Tribunal has the power to override the clear terms of the law, and the land tax assessments are correct.
Orders
The land tax assessments for the 2018, 2019 and 2020 land tax years are confirmed.
Link to decision.