|Date of judgement||26 February 2014|
|Judge(s)||J Block, Senior Member|
|Court or Tribunal||NSW Civil and Administrative Tribunal|
Meaning of “owner” for the purposes of land tax – more than one owner – effect of transfer and effect of its registration after the taxing date – meaning of “agreement for sale” for the purposes of section 26 of the Land Tax Management Act 1956
The Taxpayer, Frank Zakis Pty Ltd ATF Frank Zakis Family Trust, sought review of the Chief Commissioner’s land tax assessment requiring the Taxpayer to pay land tax in respect of the property at Clemton Park (“the Property”) in respect of the 2013 land tax year.
The Tribunal held that the Taxpayer, a trustee of a special trust, held an interest as owner on the taxing date because the transfer to the occupants of the property had not been registered by the taxing date, even though it had been executed. The Tribunal also held that s.26 (Vendor & purchaser) did not apply to exclude the Taxpayer from liability because the transfer document was not an agreement for sale. Therefore the principal place of residence exemption did not apply.
The Taxpayer owned the Property since 2005. In December 2009 the property became the principal place of residence of the Frank Zakis and his partner, Natasha Anderson. In December 2012 a transfer document was prepared for the transfer of the Property from the Taxpayer to Frank Zakis and Natasha Anderson. The transfer was dated 29 December 2012 (“the transfer”).
The first major issue considered by the Tribunal was whether the Taxpayer was an owner of the Property at 31 December 2012 (“taxing date”) by virtue of the unregistered transfer for the purposes of the Land Tax Management Act. The Chief Commissioner contended that on the taxing date the Taxpayer was an owner of the Property. The Taxpayer contended that it was not an owner of the Property at the taxing date. The Tribunal applied Chief Commissioner of Land Tax v Macary Manufacturing Pty Ltd (1999) 48 NSWLR 299, in which the Court of Appeal held that a corporate trustee, as the registered proprietor of a property, was the “owner” of that property for the purposes of section 3(1)(a) of the Land Tax Management Act. It was therefore held that the Taxpayer was the owner of the Property at the relevant time. It was also held that the fact that Frank Zakis and Natasha Anderson may have also been owners or an owner jointly, did not impinge on the issue of whether the Taxpayer was an owner at the relevant time. Therefore, under clause 11(1) of Schedule 1A of the Land Tax Management Act Land (Principal place of residence exemption) theProperty was held not to be exempt. Clause 11(1) precludes the principal place of residence exemption from applying to land which is owned, or jointly owned, by a person who is a trustee acting in the capacity of trustee of a special trust. This outcome was held not to be affected by the fact that the transfer had been executed, because an interest in land does not pass until registered in the manner provided by section 41 the Real Property Act.
The second major issue considered by the Tribunal was whether section 26 of the Land Tax Management Act (Purchaser and vendor) applies in this matter. The Taxpayer submitted that Frank Zakis and Natasha Anderson should be regarded as the purchaser under this section, to the exclusion of the Taxpayer. The Tribunal held, firstly, that the transfer instrument cannot be described as an agreement for sale, and secondly, that the transfer instrument does not contain the information required by sections 26(3) and 26(4) of the Land Tax Management Act. There was no agreement for sale in the evidence before the Tribunal.
The Taxpayer also sought to rely on section 54A of the Conveyancing Act 1919 which provides that no action may be brought in respect of a contract for the sale of land unless there is “some memorandum or note or writing signed by the party to be charged”. The Tribunal held that this provision was not relevant to the current proceedings.
The relevant assessment is confirmed.