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Fenton v Chief Commissioner of State Revenue [2012] NSWADT 96

Date of judgement 22 May 2012 Proceeding No. 116059
Judge(s) Judicial Member Block
Court or Tribunal Administrative Decisions Tribunal
Legislation cited Land Tax Management Act 1956 Clause 2(2)(a) of Sch. 1A
Land Tax Management Act 1956 Clause 12 of Sch. 1A
Catchwords Land Tax – election of principal place of residence - effect of clause 2 (2) of Schedule 1A- consideration of clause 12 of the same schedule
Cases cited Aronstan v Chief Commissioner of State Revenue [2008] NSWADT 8

Chief Commissioner of State Revenue v Aldridge & Anor (RD) (2003) NSWADTAP 50

Chief Commissioner of State Revenue v Mesiti [2003] NSWADTAP 57

Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184

Ghali v Chief Commissioner of State Revenue [2011] NSWADT 261

Summary

The taxpayer sought a review of the decision of the Chief Commissioner of State Revenue (“the Chief Commissioner”) to deny the principal place of residence ("PPR") exemption from land tax in respect of the taxpayer’s property at Mosman, NSW ("the Mosman property'') for the 2011 tax year. The taxpayer claimed he used and occupied the Mosman property as his PPR, while his de facto partner occupied another property that he owned jointly with her at North Curl Curl (“the Curl Curl property”). The taxpayer claimed that he was entitled to elect to claim the PPR exemption for the Mosman property because he and his de facto partner were members of the same family but each of them used and occupied different PPRs.

On 22 May 2012 Judicial Member Block determined that both the taxpayer and his de facto used and occupied the Curl Curl property as their PPR, and affirmed the Chief Commissioner’s decision.

Background

The taxpayer in his objection against the assessment of the Mosman property contended that both the Mosman property and a property at North Curl Curl ("the Curl Curl property'') qualified as his PPR, as during the period April 2010 to March 2011 ("the critical period'') he lived 80% of his time in the Curl Curl property, to assist his de facto spouse to finish renovations, and 20% in the Mosman property.

Office of State Revenue 2 The taxpayer contended that:

  1. cI. 12 of Sch 1A of the Land Tax Management Act 1956 ("the Act") allowed him a right to select which of the two properties was his PPR and, in the absence of an election, the clause defaulted so that the more valuable property, in this case the Mosman property, attracted the PPR exemption;

  2. although his plans were not fixed, he intended to convert the Mosman property into two separate flats for his two adult sons and to pass it on to them; and

  3. at no time did he ever change his principal place of residence from the Mosman property.

The Chief Commissioner submitted that:

  1. whether the Mosman or the Curl Curl property was the taxpayer's PPR for the 2011 land tax year, is a question of fact and degree to be determined on an objective view of the evidence before the Tribunal; the taxpayer's subjective intention alone is not sufficient;

  2. whist the taxpayer used and occupied both the Mosman and Curl Curl properties as places of residence, on an objective view of the evidence, the Curl Curl property was the taxpayer's PPR, as he resided there 80% of his time with his de facto partner; and

  3. the taxpayer did not meet the prerequisite of cI. 12 of Sch 1A of the Act which allowed a choice as to which of two PPRs was granted exemption; clause 12 only applies if different members of the same family own, use and occupy separate residences as their respective PPRs; in this case the taxpayer and his de facto wife (the relevant family unit for the purposes of the clause) used and occupied the same residence as their PPR - the Curl Curl property.

Decision

The Tribunal found as follows:

  1. the taxpayer had not discharged his onus of proof to establish that the Mosman property was his PPR in respect of the relevant year, as there was no evidence as to the maintenance of clothes or other possessions in the Mosman property. Moreover, during the critical period, the taxpayer's evidence was that he spent 80% of his time in the Curl Curl property where he lived with his de facto spouse in a stable relationship and in a house which had been extensively renovated, and his adult non-dependent son lived in the Mosman property whom he visited, thus resulting in the 80/20 ratio;

  2. in relation to the Mosman property, the taxpayer could not satisfy the continuous use requirements of a PPR - cI. 2(2)(a) of Sch 1A of the Act's - as the Mosman property was not continuously used and occupied by the taxpayer for residential purposes, given that since 1 July 2010, he lived 80% of the time at Curl Curl;

  3. as regards clause 12 of Schedule 1A of the Act, where a person has more than one place of residence, the exemption will apply only to the one residence, which is their principal place of residence.[1] The fact that the Mosman property was not the taxpayer's PPR in respect of the relevant year precludes the exemption and there was no right of election or election by default on the basis for which the taxpayer contended; and

  4. the Chief Commissioner's decision under review must be affirmed.

Link to decision

Fenton v Chief Commissioner of State Revenue [2012] NSWADT 96

Footnotes

  1. McNally & Anor v Commissioner of State Revenue [2003] NSWSC 1118 at [43].
Last updated: 17 May 2016