CITATION: York and Anor -v- Chief Commissioner of State Revenue [2003] NSWADT 119 DIVISION: Revenue Division APPLICANTS PARTIES: Barry George York Lorraine Lois York FILE NUMBER: 026040 HEARING DATES: 17/03/2003 SUBMISSIONS CLOSED: 03/17/2003 DATE OF DECISION: 05/22/2003 BEFORE: Verick A - Judicial Member APPLICATION: Land tax exemption - principal place of residence MATTER FOR DECISION: Principal matter LEGISLATION CITED : Land Tax Management Act 1956 Taxation Administration Act 1996 CASES CITED: Mesiti v Chief Commissioner [2003] NSWADT 99 APPLICANTS REPRESENTATION: In person RESPONDENT D Martin, Agent ORDERS: The decision of the Chief Commissioner under review is affirmed. Introduction 1 In this matter, the decision under review is the decision made by the Chief Commissioner of State Revenue (Chief Commissioner) on 24 October 2002 to disallow the Applicants' objection dated 2 August 2002 against a land tax assessment for 2002 land tax year issued on 5 July 2002. 2 The matter raises some unusual issues. The Applicants claim that, due to some unfortunate circumstances, they were not able to dispose of their property situated at Monterey in the relevant tax year, and that the Chief Commissioner should exercise his discretion to exempt or waive the tax payable in respect of that property. Alternatively, the Applicants claim that the land tax liability should be waived on "hardship" grounds. Background 3 The unfortunate background to this matter is found in a letter dated 31 January 2002 addressed to the Office of State Revenue. In that letter the Applicants set out in some detail the facts that are relevant for this review. The Applicants had owned and occupied the Monterey property for a number of years as their principal place of residence and was not subject to any land tax liability. On 21 September 2001, the Applicants exchanged contracts for the sale of that property with a settlement date of 16 November 2001. At the same time the Applicants purchased a property at Sylvania, with a settlement date of 16 November 2001, to be their new principal place of residence. 4 Whilst the Applicants settled on their purchase and moved into their new residence at Sylvania, unfortunately the purchasers of their Monterey property defaulted and did not proceed with the purchase. The Applicants thus remained owners of Monterey property during the relevant period. The Applicants were not able to sell the Monterey property until May 2002. 5 The Chief Commissioner allowed the Applicants exemption from land tax under s 10(1)(r) of the Land Tax Management Act 1956 (NSW) ("the LTM Act") in respect of their Sylvania property on the grounds that it was their principal place of residence. However, as they remained legal owners of the Monterey property, it became taxable in the 2002 tax year. It had ceased to be their principal place of residence and become an investment property in that year. 6 The Applicants' claim is based essentially on the fact that, had the sale of the Monterey property proceeded as planned, they would not have been in the unfortunate situation. They have also drawn attention to the fact that they were obliged to pay "relocation finance" to purchase the Sylvania property and that the Monterey property was subsequently sold for a lesser price. The Applicants also had to take legal action to obtain the deposit in respect of the default sale. The Applicants regard that, in all those circumstances, the imposition of land tax is unjust. Reasons and decision 7 In a recent decision of the Tribunal, Mesiti v Chief Commissioner [2003] NSWADT 99 (see paragraphs 12 - 24), I have examined in detail the provisions relating to the exemption, of a principal place of residence, under s 10(1)(r) and the application of the provisions of s 3(3)(a) and (b) of the LTM Act. The Applicants clearly fail, in relation to the Monterey property, the tests that allow the exemption of a property from land tax on the basis that it is the owner's or owners' principal place of residence. In the relevant year they occupied and used another property as their principal residence and as such were not entitled under s 3(3)(a) to an exemption for any other property. 8 The discretion found in s 3(3)(b) only applies in very special cases where the owner or owners have failed to satisfy a strict requirement of s 3(3)(a) and where there are circumstances to warrant the Chief Commissioner to treat the property as a principal residence for purposes of s 10(1)(r). There are no circumstances in the present matter for any consideration to be given to exercise that discretion. 9 There is also no provision in the LTM Act that gives the Chief Commissioner any discretion or power to waive or remit land tax, however unfortunate the circumstances may be. Accordingly, the Chief Commissioner was correct in disallowing the Applicants' objection against the assessment. 10 The Applicants have also relied on "hardship" as a ground for review. Waiver of land tax on hardship grounds is a matter for the Hardship Review Board set up under Division 5 of the Taxation Administration Act 1996. This Tribunal has no jurisdiction to waive any tax on such grounds. 11 In the circumstances, the objection decision under review must be affirmed. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.