Land tax court decision summaries

NSW Supreme Court Decision Summaries

Primary Production Land

2017 Decision Summary

Leppington Pastoral Co Pty Ltd v Chief Commissioner of State Revenue [2017] NSWSC 9
Date of Decision: 30 January 2017

Orders: The Land Tax Assessment Notices for the 2011 and 2014 tax years were confirmed.

The Land Tax Assessment Notices for the 2012 and 2013 tax years were revoked.

Catchwords: TAXES AND DUTIES – Land Tax – Land Tax Management Act 1956 s 10AA(3) – Whether primary production use of land was the dominant use – Identification of relevant land – Significance of use of land by consultants – Whether use of land to produce feed for taxpayer’s cattle on other land a primary production use – Meaning of dominant use

Case summary: Leppington Pastoral Co Pty Ltd v Chief Commissioner of State Revenue [2017] NSWSC 9

2016 Decision Summaries

Bellbird Ridge Pty Ltd as trustee for Bellbird Ridge Unit Trust v Chief Commissioner of State Revenue [2016] NSWSC 1637
Date of Decision: 23 November 2016

Orders: The Court revoked the assessment for 2011 but confirmed the assessments for 2012 to 2015.

Catchwords: TAXES AND DUTIES — land tax — Land Tax Management Act 1956 s 10AA — land owned by a company engaged in the business of property development — land used for the grazing and breeding of cattle — whether use of land for the grazing of cattle is the dominant use of land — use of land for residential development not commenced — use of land for the grazing of cattle the dominant use of land — whether the primary production use of land has a significant and substantial commercial purpose or character — financial return of cattle grazing small or negative — cattle grazing undertaken with only minimal time from the operator — cattle grazing operation small in size — no resources devoted to improving the pastures or stockyards of the land — grazing of cattle on the land does not have a significant and substantial commercial purpose or character

Case summary: Bellbird Ridge Pty Ltd as trustee for Bellbird Ridge Unit Trust v Chief Commissioner of State Revenue [2016] NSWSC 1637
Metricon QLD Pty Ltd v Chief Commissioner of State Revenue (No 2) [2016] NSWSC 332
Date of Decision: 31 March 2016

Decision: An appeal against the decision of Justice White has been lodged by the Chief Commissioner.

Catchwords: TAXES AND DUTIES — land tax — section 10AA(3) of the Land Tax Management Act 1956 — whether the primary production use of the lands is the dominant use of the lands — whether comparison required by s 10AA(3) of a primary production use with other uses is confined to a comparison with other physical uses of the land — held that it is not - section 10AA(3) requires a comparison of the current uses of the land — whether the mere holding of land by a property developer for future residential development and claiming tax deductions for borrowing costs and loss of value is a current use of land — held that it is not – held that to the extent that land is physically used for the carrying out of preliminary activities necessary to obtain approval for the use of land for a particular purpose the land is currently being used for a purpose other than primary production — concession that such physical use does not prevent primary production use from being dominant – whether such preliminary activities mean that use for residential development had commenced – held that it did not - using land for a rental use in respect of the agistment of cattle on the lands is a current use of land — using land for a rental and residential use of the dwellings on the land is a current use of land – held primary production use dominant except for one parcel in one land tax year

Case summary: Metricon QLD Pty Ltd v Chief Commissioner of State Revenue (No 2) [2016] NSWSC 332

2014 Decision Summary

Vartuli & Anor v Chief Commissioner of State Revenue [2014] NSWSC 678
Date of Decision: 30 May 2014

Decision: His Honour made orders dismissing the taxpayers’ Amended Summons, confirming the Chief Commissioner’s notices of assessment for the Relevant Land Tax Years, and providing for the taxpayers to pay the Chief Commissioner’s costs of the proceeding.

Catchwords: TAXATION AND REVENUE - assessment for land tax - land used for primary production - whether the taxpayers' land is exempt from land tax pursuant to s 10AA(2) of the Land Tax Management Act 1956 - whether use of land for taxpayers' cattle had "significant and substantial commercial purpose or character"

Case summary: Vartuli & Anor v Chief Commissioner of State Revenue [2014] NSWSC 678

2013 Decision Summary

Maraya Holdings Pty Ltd v Chief Commissioner of State Revenue [2013] NSWSC 23
Date of Decision: 30 January 2013

Decision: Assessment of the Chief Commissioner confirmed. Justice Gzell held that s.10AA was concerned with the use and not the user of the land. He held that where the primary production enterprise is conducted on the Properties and also on additional properties, the tests in s.10AA are satisfied if the purpose or character is evident from either the use of the Properties in isolation from the additional properties, or the use of the Properties viewed as part of an enterprise.

Catchwords: Taxes and duties - Land Tax - land used for primary production - whether use had a significant and substantial commercial purpose or character within s 10AA(2)(a) of the Land Tax Management Act 1956

Case summary: Maraya Holdings Pty Ltd v Chief Commissioner of State Revenue [2013] NSWSC 23

Principal Place of Residence

2014 Decision Summary

Delmege & Anor v Chief Commissioner of State Revenue [2014] NSWSC 1865
Date of Decision: 24 December 2014

Decision: His Honour concluded that the Chief Commissioner's reassessments of 1 October 2009 in respect of the 2002 and 2003 land tax years should be revoked but the assessments issued on that date in respect of the 2004-2006 land tax years are confirmed. There should be a recalculation of what amount, if any, is owing to the Chief Commissioner as a result of those conclusions having regard to the payments made by the Taxpayers.

Catchwords: TAXES AND DUTIES - land tax - exemptions and concessions - concession for unoccupied land intended to be owners' principal place of residence - Land Tax Management Act 1956 (NSW) s 10T - whether s 10T concession applicable to land used and occupied by persons other than owners of land during relevant land tax years - administration of land tax legislation - reassessments - Taxation Administration Act 1996 (NSW) s 9(3) - whether Chief Commissioner precluded from raising new assessments more than five years after initial assessment - meaning of full and true disclosure - whether tax liability assessed at lower amount than Chief Commissioner would have assessed if given full and true disclosure - whether taxpayer or Chief Commissioner bears onus of proving conditions in Taxation Administration Act 1996 (NSW) s 9(3)(b) which if satisfied permit Chief Commissioner to make reassessment more than five years after initial assessment - STATUTORY INTERPRETATION - savings and transitional provisions - State Revenue Legislation Further Amendment Act 2003 (NSW) Schedule 4 cl 13 - whether transitional provisions had effect of continuing to apply provisions of the Land Tax Management Act 1956 (NSW) as in force immediately before 31 December 2003 to determine availability of s 10T concession

Case summary: Delmege & Anor v Chief Commissioner of State Revenue [2014] NSWSC 1865

NSW Court of Appeal Decisions Summaries

Boarding Houses/Low Cost Accommodation

2013 Decision Summary

Perry Properties Pty Ltd v Chief Commissioner of State Revenue [2013] NSWCA 274
Date of Decision: 29 August 2013

Decision:
  1. Appeal dismissed
     
  2. Appella
Catchwords: TAXES AND DUTIES - land tax - interpretation of Land Tax Management Act 1956, s 10Q - land exempted from land tax where used for low cost accommodation and Chief Commissioner satisfied land so used and occupied in accordance with guidelines approved by Treasurer - whether purpose of guidelines to assist Chief Commissioner in being satisfied land used for low cost accommodation or to specify particular low cost accommodation entitled to exemption - latter interpretation correct

STATUTES - by-laws and regulations - interpretation - guidelines approved by Treasurer under Land Tax Management Act 1956, s 10Q - meaning of long-term residency requirement - whether freestanding discretion conferred on Chief Commissioner to grant exemption

Case summary: Perry Properties Pty Ltd v Chief Commissioner of State Revenue [2013] NSWCA 274

Primary Production Land

2017 Decision Summary

Chief Commissioner of State Revenue v Metricon QLD Pty Ltd [2017] NSWCA 11
Date of Decision: 10 February 2017

Orders: The Court dismissed the appeal and ordered the Appellant pay the Respondent's costs.

Catchwords: TAXES AND DUTIES – land tax – exemption of land the “dominant use” of which is “for” certain primary production activities – Land Tax Management Act 1956 (NSW) s 10AA(3) – where farmland acquired with a view to residential development and subdivision – where some steps taken toward realisation of that purpose – cattle raising activities conducted on the land – certain areas also the site of tenanted houses – whether land subject to any present “use” by way of “land banking” or “residential development” – whether residential use or cattle raising use was the “dominant use” of certain areas – whether the concept of “use” relevant to s 10AA(3) is confined to physical use or extends to “intangible use”.

Case summary: Chief Commissioner of State Revenue v Metricon QLD Pty Ltd [2017] NSWCA 11

2015 Decision Summary

Vartuli v Chief Commissioner of State Revenue [2015] NSWCA 372
Date of Decision: 30 November 2015

Orders: The appeal was dismissed and the Appellants ordered to pay the Chief Commissioner's costs of the appeal

Catchwords: TAXES AND DUTIES - land tax - land used for primary production - whether use had a significant and substantial commercial purpose or character - s 10AA(2)(a) of the Land Tax Management Act 1956

Case summary: Vartuli v Chief Commissioner of State Revenue [2015] NSWCA 372

2014 Decision Summary

Ferella & Anor v Chief Commissioner of State Revenue [2014] NSWCA 378
Date of Decision: 10 November 2014

Decision: The Taxpayers sought a review of the Chief Commissioner's land tax assessments for the 2007 to 2011 tax years on the basis that the dominant use of the property, which had a rural zoning, was primary production, as required for exemption under s 10AA(3) of the Land Tax Management Act.

The Court of Appeal dismissed the appeal on the basis that the issue of whether the dominant use of the land was primary production for the relevant years was a question of fact and not of law. In so far as the questions raised in the Court of Appeal were questions of law, no error was shown.

Catchwords: TAXES AND DUTIES - land tax - exemptions - where appeal lay from Appeal Panel of Administrative Decisions Tribunal on a question of law - whether rural land exempt from taxation as land the dominant use of which was for primary production - Land Tax Management Act 1956 (NSW) s 10AA(1) - where land subject to different uses - whether appropriate to treat portions of land used for different uses separately and apart - whether Tribunal required to have regard to subjective purpose and intention of users of land in determining whether dominant use of land was for primary production

Case summary: Ferella & Anor v Chief Commissioner of State Revenue [2014] NSWCA 378

2013 Decision Summary

Maraya Holdings Pty Ltd & Ors v Chief Commissioner of State Revenue [2013] NSWCA 408
Date of Decision: 09 December 2013

Decision: The appeal be dismissed with costs.

The Court concluded that:
  • the cattle operation had not, and could not, on any commercial approach, generate a profit or surplus [66]; and
     
  • in no sense can it be said that the cattle operations had any commercial purpose or character according to normal use of that term [60].
The Court determined that s.10AA(2)(a) had not been satisfied, and it was therefore unnecessary to consider whether s.10AA(2)(b) had been satisfied [67], [87].

Catchwords: TAXES AND DUTIES land tax land used for primary production whether use had a significant and substantial commercial purpose or character under s 10AA(2)(a) of the Land Tax Management Act 1956

Case summary: Maraya Holdings Pty Ltd & Ors v Chief Commissioner of State Revenue [2013] NSWCA 408

Principal Place of Residence

2013 Decision Summary

De Marco v Chief Commissioner of State Revenue [2013] NSWCA 86
Date of Decision: 18 April 2013

Decision:
  1. Appeal allowed.
     
  2. Orders 3 and 4 of the Administrative Decisions Tribunal Appeal Panel made on 15 April 2011 set aside.
     
  3. Decision of the Chief Commissioner of State Revenue of 12 November 2008 set aside.
     
  4. Case remitted to the Revenue Division of the Administrative Decisions Tribunal for determination of the question whether the Appellants' use and occupation of the land for the land tax years 2004 to 2008 satisfied the definition of residential land in clause 3 of Schedule 1A to the Land Tax Management Act 1956.
     
  5. Direct that the parties, if they wish, may adduce further evidence subject to due objection.
     
  6. Respondent to pay the Appellants' costs of the appeal.
Rochelle De Marco and Brian Hayward (“the taxpayers”) appealed from the decision of the Administrative Decisions Tribunal Appeal Panel, which upheld the first instance decision of Judicial Member Hole, affirming the decision of the Chief

Commissioner to assess the Appellants as liable for land tax for the 2004 to 2008 land tax years in respect of a property situated at Arcadia.

The appeal concerned the Chief Commissioner’s decision that the land was not entitled to the principal place of residence exemption on the basis that the use and occupation was not lawful.

The Court of Appeal, by majority decision, (Gzell J and Basten JA, McColl JA dissenting), allowed the taxpayer’s appeal, holding that the legislative scheme applying to the principal place of residence exemption does not require that the use and occupation of a residence must be lawful, in the sense of complying with the requirements of the relevant planning legislation (per Gzell J and Basten JA), at least in circumstances where the use and occupation was permissible with consent (per (Basten JA). The Court remitted the matter to the Revenue Division of the Administrative Decisions Tribunal for determination of the question whether the Appellants' use and occupation of the land satisfied the definition of “residential land”.

Catchwords: Taxation and revenue - land tax - Land Tax Management Act 1956 (NSW), cl 8(1)(a) of Schedule 1A - exemption from land tax where person owns land "used and occupied by the person as his or her principal place of residence" - whether use and occupation must be lawful - where appellants resided on land in a mobile home or caravan - where council approval required - where council approval not obtained

Statutory interpretation - principles - maxim that legislation not intended to permit a person taking advantage of own wrong - Land Tax Management Act 1956 (NSW), cl 8(1)(a) of Schedule 1A - exemption from land tax where person owns land "used and occupied by the person as his or her principal place of residence" - whether maxim requires lawful use and occupation

Words and phrases - used and occupied by the person as his or her principal place of residence - Land Tax Management Act 1956 (NSW), cl 8(1)(a) of Schedule 1A

Case summary: De Marco v Chief Commissioner of State Revenue [2013] NSWCA 86
Last updated: 13 November 2017