O'Hara v Chief Commissioner of State Revenue [2011] NSWADT 289

Date of judgement 7 December 2011 Proceeding No. 116016
Judge(s) Judicial Member Block
Court or Tribunal Administrative Decisions Tribunal
Legislation cited First Home Owner Grant Act 2000

Duties Act 1997

Taxation Administration Act 1996
Catchwords Failure to comply with residency requirements - Discretionary relief and principles involved - Penalty - Interest
Cases cited Cameron v Chief Commissioner of State Revenue [2009] NSWADT 64

Chief Commissioner of State Revenue v Incise technologies Pty Ltd & Anor [2004] NSWADTAP 19

Downs v Chief Commissioner of State Revenue [2002] NSWADT 51

Federal Commissioner of Taxation v GM Swift and others 89 ATC 5101

Giris Pty Limited v The Commissioner of Taxation of the Commonwealth of Australia (1968) 119 CLR365

Knight and anor v Chief Commissioner of State Revenue [2008] NSWADT 83

Macsif Pty Ltd v Chief Commissioner of State Revenue [2007] NSWADT 116

Nikaed Pty Ltd v Chief Commissioner of State Revenue [2005] NSWADT 21

Philpott v Chief Commissioner of State Revenue (RD) [2008] NSWADTAP 18

Trust Co. of Australia v Chief Commissioner of State Revenue [2002] NSWADT 21

Summary

The applicant sought review of a decision of the Chief Commissioner of State Revenue (the Chief Commissioner) requiring her to repay a First Home Owner Grant of $7,000.00 issued under the First Home Owner Grant Act 2000, together with a penalty of 20% ($1,400.00). The applicant also sought review of a decision of the Chief Commissioner to revoke the duties exemption granted to her in accordance with the First Home Plus Concession Scheme under the Duties Act 1997. The dutiable amount owed by the applicant on the transfer including interest was $12,054.32.

The Tribunal confirmed the Chief Commissioner’s decisions to recall the First Home Owner Grant and charge a 20% penalty. The Tribunal also upheld the Chief Commissioner’s decision to revoke the stamp duty exemption granted under the First Home Plus Concession Scheme and to charge
both the market and premium rates of interest on the duty payable.

Background

The applicant, a German national, married an Australia citizen and moved to Australia in 2001. Their marriage ended around June 2005. Family Law Court orders stated that the applicant could return to Germany with her son. The orders also stated that the applicant was to visit Australia with her son in July and August of each year to visit his father. Following settlement of the Family Law Court proceedings, the applicant returned to Germany to live in June 2006, and to re-commence her career.

Around May 2008, the applicant discovered the grant property in Coffs Harbour whilst searching for properties on the internet. The applicant organised for friends in Australia to inspect the property and a power of attorney to commence the formal purchasing process. Settlement of the applicant's purchase of the grant property occurred on 29 July 2008.

The property has been rented ever since its purchase by the applicant, who has remained in Germany except for visits to Australia every year in July and August as per the terms of the Family Court proceedings. The applicant has never lived in the grant property.

On 3 March 2010, the Chief Commissioner notified the applicant of commencement of an investigation into the applicant's residency of the grant property. On 22 March 2010, the applicant returned a Statutory Declaration in which she swore that she "started residing in the property on 30/07/2008" . The applicant also ticked a box to confirm that she was "...still living in the property" . Following investigation by the Chief Commissioner, the applicant provided another Statutory Declaration in which she declared she had never lived in or occupied the grant property.

On 17 August 2010, the Chief Commissioner issued a notice of assessment requiring the applicant to repay the $7,000 First Home Owner Grant together with a penalty of 20%, being $1,400.00. On the same date the Chief Commissioner issued a notice of assessment requiring the applicant to pay duty on the purchase of the grant property in the sum of $12,054.32.

The applicant argued that she always intended to live in the grant property after it was purchased. The reasons put forward by the applicant as to why she could not live in the grant property were that:

  • the property was purchased subject to a tenancy;

  • the applicant had to return to Germany to care for her elderly and sick parents and to sort out their affairs;

  • the applicant was working in Germany and was waiting for her eldest son to finish University; and

  • the applicant intended to return to Australia to permanently reside in 2012/13.

The respondent argued that the applicant purchased the grant property during the July/August 2008 period, when she was in Australia to comply with Family Court orders, and that since 2006 these were the only two calendar months during which the applicant visited Australia or intended to so visit.

Decision

The Tribunal did not accept that the applicant ever had a genuine intention to meet the terms of the grant and the duties exemption by taking up residence in the property. The applicant had continuously leased the property since its purchase, which categorises it as an investment property. The applicant had returned to Germany after the purchase of the property for personal and career reasons, and had not returned to Australia to take up residence, nor did she have a genuine intention to do so.

The Tribunal found that the applicant had failed to inform the Chief Commissioner of her failure to meet the residence requirement. She also failed to repay the grant, and made false assertions in a statutory declaration. The Tribunal found that this case was one in which to grant discretionary relief by waiving the residency requirement would run counter to the underlying policy and purpose of the relevant legislation.

The Tribunal affirmed the decisions under review, finding that the applicant was not entitled to the First Home Owner Grant nor to the First Home Plus duty concession. The Tribunal affirmed the decisions to impose a 20% penalty in respect of the First Home Owner Grant, and to impose both the market and premium rates of interest in respect of the unpaid duty.

Link to decision

O'Hara v Chief Commissioner of State Revenue [2011] NSWADT 289

Last updated: 17 May 2016