|Date of judgement||25 August 2017|
|Judge(s)||NS Isenberg, Senior Member|
|Court or Tribunal||New South Wales Civil and Administrative Tribunal|
MERITS REVIEW – Revenue law – land tax exemption – principal place of residence – unoccupied land - matters outside the control of the land owners – fairness
On 19 July 2011, the Taxpayers purchased two adjoining properties in Mascot, which they intended to make their principal place of residence. They lodged a development application on 12 October 2011, which was approved on 18 September 2013 and then a further application in response to the requirement by the Council of demolition on 20 March 2014.
The Taxpayers sought exemption of the land under clause 6 of Schedule 2A of the Land Tax Management Act (intended principal place of residence). However, OSR advised the Taxpayers that the Land would not qualify for the exemption for 2012 and 2013, because at the relevant time the Taxpayers used and occupied a residence in Kensington which they owned. The Kensington residence was sold in April 2013.
OSR allowed the intended PPR exemption for the 2014 and 2015 tax years, but advised the Taxpayers that they would have to commence use and occupation of the land as their principal place of residence by 31 December 2015 (4 years after purchasing the Land) or the exemptions would be rescinded.
The Taxpayers submitted a third development application to the Council but did not commence building on the Land until after 20 January 2017.
OSR revoked the exemptions for 2014 and 2015 and issued Land Tax Assessment Notices on 27 January 2017 for the 2014 to 2017 land tax years.
The Taxpayers claimed hardship, and argued that they should be exempt from paying land tax because:
The Tribunal found that the Taxpayers were not entitled to exemption under Clause 6 of Schedule 1A because they did not commence use and occupation of the Land as their PPR within 4 years after purchase.
The Taxpayers’ claims of hardship were rejected by the Tribunal as the Taxpayers had not made applications to the Hardship Review Board, as per s106A to 106D of the Taxation Administration Act 1996, and because the Tribunal did not have authority to exercise the powers of the Board.
The decision under review is confirmed.