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Commissioner of Land Tax v Christie [1973] 2 NSWLR 526
Commissioner of Taxation v Ryan (2000) 201 CLR 109
Cornish Investments Pty Ltd v Chief Commissioner of State Revenue [2013] NSWADTAP 25
Ebrahimi v Chief Commissioner of State Revenue [2022] NSWCATAD 303
Ghali v Chief Commissioner of State Revenue (2013) 85 NSWLR 378
Knowles v Municipality of Newcastle (1909) 9 CLR 534
Leppington Pastoral Co Pty Ltd v Chief Commissioner of State Revenue [2017] NSWSC 9
Metricon Qld Pty Limited v Chief Commissioner of State Revenue (No 2) [2016] NSWSC 332
Raissis v Chief Commissioner of State Revenue [2021] NSWCATAD 99
Valencia v Chief Commissioner of State Revenue [2017] NSWCATAD 261
Background
The Applicants purchased a parcel of vacant land in July 2017. In March 2018, the Applicants obtained an owner-builder permit authorising the construction of a two-storey home, inground pool and retaining walls, but construction did not proceed due to difficulties obtaining finance.
On 5 October 2018, the Applicants lodged a land tax registration return claiming the principle place of residence (PPR) exemption after being notified in writing by the Chief Commissioner of a potential liability for land tax on the Property. A “nil” Land Tax Assessment Notice was issued on 1 November 2018 for the 2018 land tax year.
In May 2019, the Applicants engaged builders and subsequently signed a contract in October 2019. The Council approved a Development Application in October 2020. The construction subsequently commenced in November 2020, practical completion of the home occurred by 17 December 2021 and hand-over to the owners took place on 21 January 2022, and the Applicants occupied the Property from 2 February 2022.
The Chief Commissioner subsequently advised the Applicants that the intended PPR concession they claimed was under review and requested information verifying that the concession requirements had been met. On 15 June 2022 the Applicants were advised that the concession under clause 6 of schedule 1A had been revoked as they had not provided evidence that they had used and occupied the Property for a continuous six-month period prior to the expiry date of their intended PPR concession.
The statutory framework
The intended PPR concession for unoccupied land is set out in clause 6 of schedule 1A of the LTMA. Clause 6(5) relevantly provides that the exemption is revoked if the person fails to actually use and occupy the land as his or her principal place of residence within 4 tax years immediately following the year in which the person became owner of the land, and that use and occupation must continue for at least 6 months. This meant the Applicants were required to commence their use and occupation of the land as their PPR by 31 December 2021.
Submissions
The Applicants conceded that they did not move into the Property until 2 February 2022, but contended that they had been prevented from moving into the Property by 31 December 2021 because of extenuating circumstances arising from the COVID-19 pandemic which caused delays in construction and resulted in the expected practical completion date in September 2021 to be surpassed. The Applicants submitted that these reasons should be taken into account in determining their tax liability, and that the PPR exemption for the 2022 land tax year (and for the preceding 4 tax years) should be allowed as they moved into the Property shortly after the cut-off date of 31 December 2021.
The Chief Commissioner submitted that there was no discretion to extend the four-year time period under clause 6(5) or to otherwise waive the land tax where the relevant statutory requirements had not been met. Accordingly, as the Applicants had not commenced occupation of the property within the four year period, clause 6(5) was not satisfied and the intended PPR exemption was not available to them for the 2018 to 2021 land tax years.
Decision
There was no factual dispute between the parties as to whether the Property was used and occupied by 31 December 2021, nor any dispute about the meanings of use and occupation. The Senior Member referred to case law establishing that intention alone, without actual present use and occupation, does not establish the PPR exemption (quoting Ghali v Chief Commissioner of State Revenue (2013) 85 NSWLR 378 at [34]), and that a change in events after the taxing date cannot inform the use and occupation of the property (citing Metricon Qld Pty Ltd v Chief Commissioner of State Revenue (No 2) [2016] NSWSC 332 at [132] –[133]; Leppington Pastoral Co Pty Ltd v Chief Commissioner of State Revenue [2017] NSWSC 9 at [52] and Raissis v Chief Commissioner of State Revenue [2021] NSWCATAD 99 at [35] – [40]).
Accordingly, the Senior Member was not satisfied that the intended PPR concession applied for the 2018 to 2021 nor the PPR exemption for the 2022 land tax years as the Applicants were not in use and occupation of the Property at any time prior to 2 February 2022. As the Chief Commissioner and the Tribunal had no ability under the LTMA to exercise a discretion to allow the concession or exemption on the grounds of unfairness or to extend or waive the requirement that the Property be used and occupied within the four year period, the Chief Commissioner’s decision to assess the Applicants as being liable for land tax within the relevant land tax years was upheld.
Orders
The Respondent’s decision of 15 June 2022 was affirmed.