|Date of judgement||28 January 2015|
|Judge(s)||NS Isenberg, Senior Member|
|Court or Tribunal||NSW Civil and Administrative Tribunal|
Land tax – primary production exemption – dominant use – s10AA Land Tax Management Act 1956
This matter involved an application for review of the Chief Commissioner’s decision not to apply the primary production exemption from land tax (contained in section 10AA of the Land Tax Management Act 1956 (“LTMA”)), in respect of the property at 406 Pitt Town Dural Road, Maraylya (Lot 1 DP 235250) ("the Property") for the 2009 to 2013 land tax years.
The Tribunal affirmed the decision of the Chief Commissioner that the primary production exemption was not available to the Taxpayers in respect of the Property in the relevant tax years.
The Property was zoned “rural” for the relevant land tax years, and so the key issue in the case was whether the dominant use of the Property was the maintenance of animals (Alpacas, chickens and horses) for the purpose of selling them or their natural increase or bodily produce within s. 10AA(3)(b) of the LTMA.
During the relevant years, the Taxpayers owned the Property and leased it to a tenant, who resided in a house on the Property. The Taxpayers claimed that the dominant use of the Property was primary production because the tenant:
The Chief Commissioner submitted:
The Tribunal was not satisfied that the Property was used, for any tax year during the relevant period, for the maintenance of alpacas for the purpose of selling the animals, their offspring or their bodily produce, sufficient to satisfy the statutory test.
In making this finding, Senior Member Isenberg:
The Tribunal was of the view there was not sufficient evidence that horses were maintained for the purpose of selling them or their natural increase. The evidence indicated there were at most 2 horses, one of which was a gelding, and there was a lack of any evidence of horse breeding activities or of sales (at 57).
The Tribunal was not satisfied that poultry was maintained for the purpose of selling them or their natural increase or bodily produce. In this regard, Senior Member Isenberg referred to the evidence of the tenant that his primary use of the birds was to show them, and that his purpose in maintaining the poultry was as a hobby, "...to save the species and produce the best breed he could", and any sales of poultry were ancillary to the sale of the portable poultry sheds that the tenant constructed and sold (66).
Ultimately, the Tribunal accepted that parts of the Property were used during the relevant period to maintain horses, alpacas and poultry. However, having regard to the evidence the Tribunal was not satisfied that the dominant use of the Property for any year during the relevant period was for the maintenance of animals for the purpose of selling them or their natural increase or bodily produce. In reaching this finding, Senior Member Isenberg emphasised that no evidence of primary production income derived from the use of the Property was placed before the Tribunal (at 88).
Accordingly, the Tribunal confirmed the land tax assessments for the 2009 to 2013 land tax years (inclusive).