Alldritt v Chief Commissioner of State Revenue  NSWADT 72
|Date of judgement||26 April 2012||Proceeding No.||116069|
|Judge(s)||Judicial Member Verick|
|Court or Tribunal||Administrative Decisions Tribunal|
|Legislation cited||Land Tax Management Act 1956 (s.10(1)(r) & Schedule 1A)|
|Catchwords||Land Tax - principal place of residence exemption - whether land "residential land" with an "excluded occupancy" - principal residence leased and owners in occupation of a studio on the land|
|Cases cited||Chief Commissioner of State Revenue v Ferrington (GD)  NSWADTAP 41
Chief Commissioner of State Revenue v McGrath  NSWSC 387
Chief Commissioner of State Revenue v McIlroy  NSWADTAP 21
Haddad v Chief Commissioner of State Revenue (RD)  NSWADTAP 35
McGrath and anor v Chief Commissioner of State Revenue  NSWADT 46
This matter involved an application by Mr Michael Alldritt and Mrs Farimah Alldritt (“the Taxpayers”) for a review by the Administrative Decisions Tribunal (“the Tribunal”) of the Chief Commissioner’s decision to refuse to grant the Taxpayers the principal place of residence land tax exemption for a property situated at West Pymble (“the West Pymble property”) for the 2007 land tax year. On 28 October 2010, the Chief Commissioner had issued a land tax assessment to the Taxpayers in respect of the West Pymble property for the 2007 land tax year (“the Assessment”).
Judicial Member Verick decided that the Assessment must be confirmed.
The Taxpayers purchased the West Pymble property on 30 September 1999 and sold the property on 16 December 2007. The West Pymble property comprises a main residence and a detached studio. In 2006 the main residence was rented to tenants.
The Taxpayers purchased land at Green Point (“the Green Point property”) in the Central Coast on 30 June 2004. The Taxpayers claimed that they used and occupied the studio at the West Pymble property as their principal place of residence up to sometime in January/February 2007 when they commenced to occupy the Green Point property. The Taxpayers after purchasing the Green Point property commenced to construct a residence on the land. The Taxpayers had received an occupation certificate for the Green Point property in June 2006 but claimed that for various reasons they were not able to occupy the Green Point property until January/February 2007. Mr Alldritt claimed that, in the second half of 2006 the Taxpayers’ children and Mrs Alldritt lived with relatives whilst Mr Alldritt used the studio at the West Pymble property as the Taxpayers' principal place of residence.
Mr Alldritt as the agent for the Taxpayers submitted that the West Pymble property was the Taxpayers’ principal place of residence until around January/February 2007. He submitted that the Green Point property was not habitable even though an occupation certificate was issued for that property in June 2006. He stated that he did not spend any nights in the Green Point property during the second half of 2006 and noted that there were problems with car access to the Green Point property even after the occupation certificate had been issued.
Chief Commissioner’s submissions
The Chief Commissioner submitted that that Assessment should be affirmed:
on technical grounds, because the principal place of residence exemption is not available to the Taxpayers for the West Pymble property for the 2007 land tax year since the house was rented out and is not an “excluded residential occupancy” for the purposes of the principal place of residence exemption in the land tax legislation (clause 4, Schedule 1A of the Land Tax Management Act 1956(“the LTMA”). The ADT appeal panel decision in Haddad v Chief Commissioner of State Revenue  NSWADTAP 35 at -(“Haddad’s case”)is clear authority that the principal place of residence exemption is not available in these circumstances.
on evidentiary grounds, because there is independent objective evidence by way of subpoenaed detailed records from Energy Australia, Telstra and ANZ which indicate that the Taxpayers used the Green Point property as their principal place of residence for the 2007 land tax year.
The Tribunal found that the Assessment must be confirmed as the decision of the Appeal Panel of the Tribunal in Haddad’s case made clear that the Taxpayers were prevented from claiming the principal place of residence exemption in these circumstances. In this regard, Mr Verick noted that the principal place of residence exemption was not available for the Taxpayers because (as was the case in Haddad’s case) the main residence at the West Pymble property (being the house rented to the tenants) was not an “excluded residential occupancy” during the relevant period. As a result, the West Pymble property was not a “parcel of residential land” under clause 3 of Schedule 1A to the LTMA. Consequently the principal place of residence exemption in clause 2 of Schedule 1A to the LTMA, which relevantly only applies to a parcel of residential land, could not apply to the West Pymble property for the 2007 land tax year.
The Tribunal stated (at para 26):
“...It is well established that while sleeping by itself in a place can be an indication of a principal place of residence, it (is) not the sole matter to be taken into account. It must be a place where the owner has his or her belongings and "where he or she spends the most time, and which is shared (where applicable) with his or her spouse and children" (Chief Commissioner of State Revenue v McIIroy  NSWADTAP 21 at . It is also well established that "to occupy a home as his or her principal place of residence a person's occupation must have a degree of permanence to it: a connection to a place of residence of a transient, temporary, contingent or passing nature is not sufficient, nor occupation for any other reason" (Chief Commissioner of State Revenue v Ferrington (GD) NSWADTAP 41 at .”
The Tribunal observed that the Taxpayers had failed to produce any objective or independent evidence that the West Pymble property was their principal place of residence for the 2007 land tax year. The Tribunal noted that the Chief Commissioner was able to obtain by way of subpoena detailed records from Energy Australia indicating usage of electricity at the Green Point property during the second half of 2006, telephone records from Telstra indicating that a large number of calls were made by Mr Alldritt in the region of Green Point during that period, bank records indicating use of funds by Mr Alldritt in the Central Coast region during that period and RTA records showing the Green Point property address as the Taxpayers’ address on their drivers licences, and records from the Electoral Commission recording the Taxpayers’ address as being the Green Point property from 3 March 2007. The Tribunal also observed that only Mr Alldritt spent some nights at the West Pymble studio, while Mrs Alldritt and their children resided during the relevant period with relatives and all their household belongings had already been sent to the Green Point property (at ).