Find our top tasks, calculators and publications
Quickly pay your liability or fine
Register, manage and pay, and check service availability
Calculate your liability or grant amount
Search our publications, forms, rulings and documents
Clarification and examples to help you comply
Download information packs and register for upcoming events
Our details if you need to reach us
Date of judgement | 2 November 2011 |
Proceeding number | 096105 |
Judge(s) | Judicial Member Frost |
Court or Tribunal | Administrative Decisions Tribunal |
Land tax - primary production use of land - "dominant use" of land - physical activity on the land undertaken by a person other than the owner of the land - whether "dominant use" is measured only by reference to physical activities conducted "on" the land - whether the primary production use of the land has a "significant and substantial commercial purpose or character" - whether the primary production use of the land is engaged in "for the purpose of profit on a continuous or repetitive basis"
Abbott v Commissioner of Land Tax [1979] VR 297
Australian Football League v Commissioner of State Revenue [2004] VCAT 1882
Cornish Group Pty Ltd v Chief Commissioner of State Revenue [2009] NSWADT 191
Council of the City of Newcastle v Royal Newcastle Hospital (1957) 96 CLR 493
Greenville Pty Ltd v Commissioner of Land Tax (NSW) (1977) 7 ATR 278
Hope v Bathurst City Council (No.3) [1994] NSWCA 139
Leda Manorstead v Chief Commissioner [2010] NSWSC 867
Minister Administering the Crown Lands Act v NSW Aboriginal Land Council [2008] HCA 48
Nancy Shetland Pty Ltd v The Melbourne and Metropolitan Board of Works (1974) 48 ALJR 448
Reysson Pty Ltd v Chief Commissioner of State Revenue [2009] NSWADTAP 17
Saville v Commissioner of Land Tax (NSW) (1980) 81 ATC 4373
Sonter v Commissioner of Land Tax (NSW) (1976) 7 ATR 30
Ashleigh Developments Pty Ltd (“Ashleigh Developments”) sought a review of the decision of the Chief Commissioner of State Revenue (“Chief Commissioner”) to assessments for land tax for the 2007 to 2010 land tax years in respect of a property situated in Milton, NSW (“the Land”).
At issue in these proceedings was whether the primary production exemption under s10AA of the Land Tax Management Act 1956 ("the Act") should have applied in respect of the Land. Judicial Member Frost affirmed the decision of the Chief Commissioner that the primary production exemption was not available during the relevant tax years.
In 2006, Ashleigh Developments purchased the Land from a farmer who continued to use the Land under lease for beef cattle grazing. The Land was zoned residential and the local Council granted approval to subdivide the Land into 157 residential lots. Ashleigh Developments spent approximately $1.5 million on various fees (such as legal fees, Council fees, and surveys/engineering fees) related to ancillary processes associated with the development and/or holding of the Land. However, Ashleigh Developments did not procure any substantial physical works or improvements to the Land, the Land was not connected to services (sewerage, water, gas or electricity) and no kerbs or gutters or roads were laid. The only substantial physical use of the Land was the farmer's beef cattle grazing, which the farmer used in conjunction with 280 hectares of other land in the Shoalhaven area. Ashleigh Developments contended the only "use" of the Land was the physical use of the Land, ie, beef cattle grazing. The Chief Commissioner contended that there were three "uses" of the Land:
Ashleigh Developments held the Land on bare trust for two joint venturers carrying on a property development business. A significant write-down in the value of the Land meant the holding of the Land as trading stock resulted in the joint venturers paying almost no tax on the joint venturers obtaining a tax advantage in the form of sheltering other income.
Ashleigh Developments sought an exemption from land tax on the basis the Land was used for primary production under s 10AA of the Act. There were 3 issues:
As a preliminary matter, Judicial Member Frost determined that:
Judicial Member Frost concluded that while the use of the Land satisfied the commerciality and profit tests, the dominant use test was not satisfied.
The Chief Commissioner's land tax assessments were confirmed.
Ashleigh Developments Pty Ltd v Chief Commissioner of State Revenue [2011] NSWADT 250