Raissis v Chief Commissioner of State Revenue [2021] NSWCATAD 99
Background
The applicants were the joint owners of a property at Paddington (“Paddington Property”), which was purchased on 26 October 2015. The applicants developed the Paddington Property by constructing a three-storey dwelling on the land. An occupation certificate was issued for this development on 12 August 2020.
The applicants had previously applied for and had been granted the land tax concession under cl.6 of Schedule 1A for unoccupied land intended to be used as a person’s principal place of residence (PPR), for the 2016 to 2019 land tax years. The applicants applied for an exemption from land tax for the 2020 land tax year on the basis that, as at 31 December 2019, the Paddington Property was being used and occupied as an owner’s actual PPR.
The Chief Commissioner rejected this application and issued assessments which imposed land tax on the Paddington Property for the 2016 to 2020 land tax years inclusive, on the basis that the applicants did not satisfy the principal place of residence exemption for the 2020 land tax year, nor the intended principal place of residence concession for the 2019 land tax year, meaning that the concession previously granted for the 2016 to 2019 land tax years was revoked.
The Statutory Framework
The LTM Act provides an exemption from land tax for a taxpayer’s actual or intended principal place of residence. The terms of the exemption and related concessions are set out in Sch. 1A of the LTM Act.
The subject of this decision is the exemption in Schedule 1A, cl. 2 and the concession in cl. 6 of Schedule 1A.
The issue in dispute was whether the Paddington Property had been used and occupied by either owner within 4 years after the taxing date for the 2020 tax year, that is by midnight on 31 December 2019, as this fact would determine both the application for the exemption for the 2020 land tax year and the concession for the 2016 to 2019 land tax years.
Submissions
The applicants submitted that one of the owners used and occupied the Paddington Property as his principal place of residence as at 31 December 2019. In support, the applicants provided statutory declarations in which they stated that an owner resided at the Paddington Property between December 2019 and July 2020 and documentary evidence that he had opened an electricity account for the Paddington Property and updated his licence address and electoral enrolment in January 2020.
The Chief Commissioner submitted that the applicants’ evidence did not prove to the requisite standard that he had used and occupied the Paddington Property as his PPR. In particular, the Chief Commissioner pointed to evidence from Woollahra Municipal Council suggesting that construction continued throughout December 2019 and January 2020, meaning that it would be difficult to reside at the Paddington Property in the necessary sense.
Decision
The Tribunal held that the applicants had not discharged their onus in proving that the Paddington Property was used and occupied by one of the owners as his PPR as at 31 December 2019 (at 77-78]). The Tribunal found that the owner’s connection to the Paddington Property was temporary and transient (at [76]). In support of this finding, the Tribunal identified the following issues with the applicants’ evidence (at [71]-[75]):
- The Paddington Property was not sufficiently developed so as to facilitate use and occupation of it as a person’s settled abode. Electrical compliances were not granted until 18 February 2020, waterproofing did not occur until 5 March 2020 and an occupation certificate was not issued until 12 August 2020.
- The documentary evidence concerning changes to an owner’s address were dated after 31 December 2019.
- An electricity connection and supply was not established until 12 January 2020.
- There was no evidence about the furniture and fittings that were at the property.
- Evidence given by an owner in cross-examination suggested that his connection to the Paddington Property at 31 December 2019 was of a transient, temporary or contingent nature as he was spending time with family and on a holiday at that period in time.
The Tribunal also held that there was no reason to remit any interest imposed by the assessments (at [81]).
Orders
- Each of the Chief Commissioner’s assessments of land tax covering the land tax years 2016 to 2020 inclusive is confirmed.
- The Chief Commissioner’s decision to disallow the application of clause 6 of Schedule 1A of the Land Tax Management Act respect of the Applicants’ liability for land tax on the relevant property for the land tax years 2016 to 2020 inclusive is affirmed.
- The Chief Commissioner’s decision to impose interest consisting of both the market rate component and the premium component for land tax on the relevant property for the land tax years 2016 to 2020 inclusive is affirmed.
https://www.caselaw.nsw.gov.au/decision/178fc4cdc571d3311f7b18eb