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Case study: Primary production land tax exemption

31 May 2019

Leo McCabe owned two parcels of land in Kurrajong, NSW, for which he claimed an exemption from land tax because, allegedly, he used the land primarily for primary production.

In February 2019, Mr McCabe argued in the NSW Civil and Administrative Tribunal that although he hadn’t grazed any cattle on the land during the 2017 and 2018 land tax years, he had maintained the land in perfect grazing condition until a fence was built and the cattle moved from adjoining properties.

The tribunal was satisfied that Mr McCabe intended to fence the land and use it for grazing cattle in the future, however, it noted:

  • the test for whether land is used for primary production is an objective test – an inquiry into the actual use of land – that can’t be determined by the intentions of the owner
  • preparing land for primary production doesn’t in itself constitute using the land for primary production
  • some benefit needs to accrue from the land being kept unused.

Accordingly, the primary production exemption wasn’t available to Mr McCabe.

Read the case summary.