Bulgak v Chief Commissioner of State Revenue [2015] NSWCATAD 237

Date of judgement 17 November 2015 Proceeding No. 1410528
Judge(s) P Wass SC
Court or Tribunal New South Wales Civil and Administrative Tribunal
Legislation cited Administrative Decisions Review Act 1997

Duties Act 1997

First Home Owner Grant (New Homes) Act 2000

Taxation Administration Act 1996
Catchwords First home owner grant - stamp duty concession - principal place of residence
Cases cited Deverich v Chief Commissioner of State Revenue [2010] NSWADT 268

Khalil v Chief Commissioner of State Revenue [2011] NSW ADT 276

Mohamed v Commissioner of State Revenue [2012] NSWADT 169

Chief Commissioner of State Revenue v Ferrington (GD) [2004] NSWADTAP 41

Nakhoul v Chief Commissioner of State Revenue [2009] NSWADT 103

Background

On 17 November 2015, the decision was handed down in this matter by the NSW Civil and Administrative Tribunal (“the Tribunal”). The Crown Solicitor acted for the Chief Commissioner of State Revenue (“Chief Commissioner”), the Chief Commissioner.

In these proceedings, the Applicant, Mr Alexander Bulgak sought review of the Chief Commissioner reversing a decision to provide a grant under the First Home Owner Grant (New Homes) Act 2000 (“FHOG Act”) and the stamp duty concession under the Duties Act 1997 (“Duties Act”) in respect of a property at Campbelltown (“the property”).

In December 2011 the Applicant exchanged contracts for the purchase of the Property and settlement took place on 1 March 2012. The Applicant had applied for and was granted the First Home Owner grant and a First Home Plus stamp duty concession for the purchase. In December 2013 the Chief Commissioner sought confirmation from the Applicant that he had complied with the residency requirement, which the Applicant confirmed. The Chief Commissioner then conducted an investigation into compliance by the Applicant, determining that the residency requirement condition had not been satisfied.

On 26 February 2014 the Chief Commissioner sent a letter to the Applicant informing him that it had reversed its decision to provide both the grant and the stamp duty concession and issued both an Assessment Notice requiring repayment of the grant with a penalty and a Notice of Assessment for stamp duty with penalty tax and interest. The Applicant’s objection was disallowed.

The Statutory Framework

The eligibility criteria for the first home owner grant are set out in Division 2 of the FHOG Act. Relevantly, s. 12(1) requires an Applicant for a first home owner grant to “commence occupation of the home to which the application relates as the applicant’s principal place of residence within 12 months after completion of the eligible transaction.” It also requires that the Applicant “occupy the home as a principal place of residence for a continuous period of at least 6 months.” This requirement is referred to as the residency requirement.

Section 76(1) of the Duties Act contained a similar requirement.

Decision

Occupation within 12 months

The first issue before the Tribunal was whether the Applicant took up occupation of the property on or before 1 March 2013, being 12 months from the date of purchase. The Chief Commissioner drew the Tribunal’s attention to the fact that the Applicant had sought an extension on 21 February 2013 to comply with the residency requirements.

The Applicant’s parents swore affidavits deposing that the Applicant moved in on 28 February 2013. The Chief Commissioner submitted that the Applicant’s parents had difficulty recalling the precise dates of particular events and that the Tribunal should regard with this with caution.

The Chief Commissioner also relied on the fact that the Applicant stated that he took occupation of the property on 28 March 2013 in his objection to the Chief Commissioner’s assessment on 22 April 2014.

The Tribunal accepted the Applicant’s submissions, finding that it was more likely than not that he occupied the property within the 12 month period, being on or before 1 March 2013.[1]

Nature and quality of occupation

The second issue was whether the nature and quality of the occupation was sufficient for it to be Applicant’s principle place of residence. The Chief Commissioner relied on Deveridge v Chief Commissioner of State Revenue [2010] NSWADT 268 and the Chief Commissioner submitted that sleeping at a property is not sufficient to establish it as a principal place of residence. It is also relevant where the Applicant eats, his use of electricity, furniture and fittings, where he entertains and what address the Applicant used as a residential address for his mail and formal documents such as his electoral records and driver’s licence.[2] The Chief Commissioner relied on the Applicant’s admission that he used the property during the period for little more than sleeping, that his electricity usage was low and that he left the property early in the morning and arrived home late at night.

The Applicant submitted that it was necessary to take into account the fact that he had a busy lifestyle in considering whether he occupied the property as his principle place of residence. He relied on Mohamed v Commissioner of State Revenue [2012] NSWADT 169 and that when his busy lifestyle is taken into account, the evidence such as his relatively low levels of electricity usage did not lead to a conclusion that he did not reside in the property with the quality of occupation and sufficient degree of permanence required by cases such Chief Commissioner of State Revenue v Ferrington (GD) [2004] NSWADTAP 41.[3]

The Tribunal considered various factors such as the inhabitability of the property, the receipt of rental income during the first 12 months of ownership, the Applicants subjective intention, the nomination of addresses in formal documents, the use of the property of a past resident as his address on formal documents, the lack of an alternative principal place of residence, the use of the property to socialise and the use of the kitchen and bathroom in the property.

The Tribunal found that the Applicant had a busy lifestyle, working and studying long hours each day and generally ate his meals at work or obtained takeaway to consume at the property. The Applicant did not use the address of the property for formal documents however the Tribunal accepted his explanation that it was due to the lack of security of the mailbox and that he did not regard changing his nominated address with the Australian Electoral Commission as important as he was still within the same electorate.

The Tribunal determined objectively, with regard to the lifestyle of the Applicant and his subjective intention in residing in the property, that in the circumstances the Applicant did occupy the property during the relevant period as his principle place of residence.[4]

Orders

The following orders were made:

  1. The decision of the Chief Commissioner of State Revenue dated 26 February 2014 requiring repayment of the grant and any penalty is set aside.

  2. The decision of the Chief Commissioner of State Revenue, disallowing the Applicant’s objection, is set aside.

  3. The decisions of the Chief Commissioner to reverse the decision to pay the grant and to reassess the stamp duty exemption or concession are also set aside.

  4. Any relevant Notices of Assessment, including the assessment issued on 26 February 2014 and any penalty assessments, are set aside.

Link to decision

Bulgak v Chief Commissioner of State Revenue [2015] NSWCATAD 237

Footnotes

  1. ^ Bulgak v Chief Commissioner of State Revenue [2015] NSWCATAD 237 [93]

  2. ^ Ibid [97]

  3. ^ Ibid [101]

  4. ^ Bulgak v Chief Commissioner of State Revenue [2015] NSWCATAD 237 [166]

Last updated: 17 May 2016