Carcary v Chief Commissioner of State Revenue  NSWADT 244
|Date of judgement||28 October 2011||Proceeding No.||116036|
|Judge(s)||Judicial Member A Verick|
|Court or Tribunal||Administrative Decisions Tribunal|
|Legislation cited||Land Tax Management Act 1956
Taxation Administration Act 1996
|Catchwords||Principal Place of Residence Exemption|
|Cases cited||Chief Commissioner of State Revenue v Aldrige  NSWADTAP 50
Chief Commissioner of State Revenue (RD) v Mcllroy  NSWADTAP 21
Chief Commissioner of State Revenue v Ferrington (GD)  NSWADTAP 41
Chief Commissioner of State Revenue v Mesiti  NSWADTAP 57
Chief Commissioner of State Revenue v Paspaley  NSWCA 184
Saboune v Chief Commissioner of State Revenue  NSWADT 8
Yen-Cheng Chuang & Anor v Chief Commissioner of State Revenue  NSWADT 160
Zakariya v Chief Commissioner of State Revenue  NSWADT 26
The applicant sought a review of the decision of the Chief Commissioner of State Revenue (“Chief Commissioner”) to disallow her objection to an assessment for land tax for the 2011 land tax year in respect of a property situated in Mayfield, Newcastle (“the Mayfield property”).
Judicial Member Verick affirmed the decision of the Chief Commissioner that the principal place of residence (“PPR”) exemption pursuant to s10(1)(r) of the Land Tax Management Act 1956 ("the Act") was not available in respect of the Mayfield property.
The applicant is an owner of several properties including the Mayfield property. The Chief Commissioner assessed all the properties for land tax for the 2011 land tax year.
The facts were not in dispute. The applicant resided in Port Macquarie since 1998 and has worked in Port Macquarie at all times. From 1998 to 2006 she lived in rented properties with her two children. In 2006, the applicant and her children commenced to reside with the applicant's parents at their house in Port Macquarie.
The applicant purchased the Mayfield property in May 2010. The applicant’s daughter and son, along with her son's partner, commenced occupation of the Mayfield property in June 2010. The applicant stayed overnight at the Mayfield property for between 1 and 13 nights each month during the period May to December 2010. With the exception of two of these nights, all other nights at the Mayfield property were in transit from Port Macquarie for work trips and when travelling on holidays.
The applicant's case was essentially that the Mayfield property was purchased as her "family's place of residence". It was submitted that her daughter, son and his partner resided at the Mayfield property "permanently and continuously". It was also submitted that the applicant stayed at her parent's house while working in Port Macquarie and that she was at her "family home at all other times". It was submitted that she had not changed her electoral roll or driver's licence address to Mayfield because she worked in Port Macquarie and stayed at her parent's house during the week. Further, she intended to "move to Mayfield permanently when she found work in Newcastle".
The applicant referred to Clause 12(2) of Schedule 1A of the Act:
"If members of a family own (whether jointly or separately) more than one residence used and occupied by any of them as a PPR, the Chief Commissioner is to treat the one place of residence elected as the PPR of the family as the PPR of all members of the family in respect of a tax year."
"Family" includes a dependent child under 18 years who is not legally married. The applicant submitted that at the time of the purchase her daughter was a dependant and as such she was entitled to claim the exemption.
The Chief Commissioner argued the applicant was not entitled to the PPR exemption for the Mayfield property because the overwhelming weight of the evidence was that her PPR was in fact the Port Macquarie property.
Clause 2(2) of Schedule 1A of the Act provides:
"Land is not used and occupied as the PPR of a person unless:
the land, and no other land, has been continuously used and occupied by the person for residential purposes and for no other purposes since 1 July in the year preceding the tax year in which land tax is levied, or
in any other case, the Chief Commissioner is satisfied that the land is used and occupied by the person as the person’s principal place of residence."
The Chief Commissioner submitted the applicant had not established that the Mayfield property had been continuously used and occupied during the period as required by the Act.
The Chief Commisisoner further submitted that Clause 2(2)(b) does not confer a true discretion and, even if it did, there were no such circumstances in this matter to justify the application of the discretion.
It was also submitted that Clause 12(2) of Schedule 1A did not enable the applicant to 'elect' to claim the exemption in respect of the Mayfield property because the applicant or her family did not own more than one residence used and occupied by them as a PPR. Neither she nor her dependent children under 18 years owned the Port Macquarie property.
Judicial Member Verick held that the applicant was the owner of the Mayfield property but not the Port Macquarie property. Accordingly no question of election arose in this matter. The only question that arose was whether the Mayfield property was the applicant's PPR for the 2011 tax year.
The applicant failed the test under Clause 2(2)(a) of Schedule 1A of the Act as, on her own evidence, she used the Port Macquarie property as her place of residence. She had continued to live there and had all her belongings there.
In addition the applicant failed to establish that the Mayfield property was her principal place of residence. The use of the term "principal" suggests a person may use and occupy more than one residence but the exemption was only available for the principal residence. It was held that to determine which property was the applicant’s principal residence, an objective test must be applied. The conclusion is determined by considering the extent and quality of use and occupation of each residence. Factors to be examined include where the applicant sleeps, eats and entertains, electricity usage, furniture and fittings, use of the address for mail, driving licences, electoral rolls and other documentation.
There must be some "degree of permanence", not a connection that is contingent or passing in nature. Further, it was held that the intention of the person was relevant but not determinative of the issue. As the applicant stayed overnight whilst on holiday or in transit from Port Macquarie and no other evidence was produced, it was held that her stay at the property was no more than temporary or passing in nature.
The test under Clause 2(2)(b) allowed the Chief Commissioner the discretion to grant the exemption where an owner did not meet the requirements of Clause 2(2)(a). Judicial Member Verick held that this discretion is a “true discretion”, meaning it may be applied in any case where the requirements of clause 2(2)(a) are not met, but the discretion is limited to the extent that the circumstances of a particular case are not governed by another clause in Schedule 1A. However, it cannot be exercised in an arbitrary manner and must not undermine the object of the exemption. It should only be granted where there is clearly a bona fide use and occupation of the property as the owner's PPR after the 1 July preceding the relevant tax year.
In the present matter, the applicant used and occupied the Mayfield property on a "fairly casual basis". Her own evidence indicated that she continued to use the Port Macquarie residence as her residence and she used the Mayfield property whilst in transit. Just because the Mayfield property was the principal place of residence of her children did not enable her to claim the exemption.
The assessment by the Chief Commissioner for the 2011 land tax year was affirmed.