CITATION: Crea & Anor -v- Chief Commissioner of State Revenue [2002] NSWADT 125 DIVISION: Revenue Division APPLICANTS Paul Crea PARTIES: Lenore Crea RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 026003 HEARING DATES: 31/05/2002 SUBMISSIONS CLOSED: 05/31/2002 DATE OF DECISION: 07/18/2002 BEFORE: Hole M - Judicial Member APPLICATION: Land tax exemption - principal place of residence MATTER FOR DECISION: Principal matter LEGISLATION CITED : Land Tax Management Act 1956 CASES CITED: APPLICANTS REPRESENTATION: In person RESPONDENT G Van Emmerick, agent ORDERS: 1. Land Tax is payable by the Applicants in respect of the Land Tax Year 2001 as owners of a property at Northbridge (their principal place of residence) and of a property at Castlecrag. ; 2.. No interest is to be payable on the assessed amount. 1 The Applicants have filed an application for review of the decision by the Commissioner in relation to the assessment of land tax in respect of a property purchased by them in the year 2000. 2 On 22 June 2000 the Applicants purchased a house at 292 Edinburgh Road, Castlecrag ("Castlecrag") with a view to demolishing that house and constructing a new home. Settlement occurred shortly thereafter. 3 The Applicants lived in a home at 6 Neeworra Road, Northbridge ("Northbridge") and proceeded to sell that home at auction on 23 November 2000. Settlement occurred on 16 February 2001. 4 The Applicants proceeded to rent the house at Castlecrag with the intent that the property would not be vandalised and that they would be able to then proceed orderly towards selling their home at Northbridge and making appropriate arrangements for the construction of a new home at Castlecrag including the necessary activities related to such construction such as designing the home and obtaining council's approval to construction of that home. 5 As is usual in exercises of this type, there were delays in obtaining finalised plans, forwarding those to the local council and then in obtaining council's approval to those plans which had the effect of taking the date when they could in fact construct their new home and move into it to well beyond 1 January 2001. 6 As a result of the delays referred to in paragraph 5 the Applicants were in accordance with the provisions of the Land Tax Management Act subject to land tax in relation to the property at Castlecrag, as the value of this property exceeded the land tax threshold. 7 From the time that the Applicants settled the sale of their home at Northbridge on 14 February 2001 (and presumably until they are able to move into their new home at Castlecrag), they live in rental accommodation. 8 The Commissioner has submitted that as at 31 December 2000 the home at Northbridge was exempt from payment of land tax as it was the Applicants' principal place of residence. 9 The Commissioner has levied land tax on the value of the land at Castlecrag which is over the threshold on the basis that it is a property at the time of the assessment of land tax on 31 December 2000 which is not an exempt property within the definition of Section 10 of the Land Tax Management Act. 10 The Commissioner has submitted that on 31 December 2001 the principal place of residence is the property occupied by the Applicants being a rented property and that therefore the property at Castlecrag did not qualify for an exemption as the principal place of residence of the applicants, however, Section 10T was applicable. 11 Pursuant to Section 10T(1) the Commissioner can consider the intended use and occupation of the land may be regarded as its actual use and occupation for the purposes of considering whether land tax is payable and Section 10T(4) provides that if a person becomes an owner of land and there is an exemption applicable then that exemption may continue for the two tax years immediately following the tax year in which the person became an owner. 12 Pursuant to S10T(1) of the Act the Commissioner may grant a concession in respect of liability to land tax in the event that an owner becomes liable as a result of being unable to claim an exemption as the principal place of residence is uninhabitable or not yet built. The sub-sections to Section 10T when applied to the present circumstances precluded an exemption for the property at Castlecrag on account of the ownership of Northbridge, prior the completion of the sale of Northbridge. That is for the land tax year 2001. 13 The Commissioner has by applying Section 10T granted an exemption to the Applicants for payment of land tax for the 2002 tax year being land owned by the Applicants as at 31 December 2001 on the basis that the land at Castlecrag was intended to be used and occupied as the owner's principal place of residence. It is noted that this concession is available for two tax years immediately following the tax year in which the land was purchased, provided that the exemption in respect of the principal place of residence has not been applied. 14 The Applicants are not the only parties liable to land tax that have not been aware of the provisions relating to the ownership of a further property other than their principal place of residence. As a matter of public policy, the responsibility of the ownership of property including the necessity to be assessed and pay rates and taxes on the property remains with the land owner and those advising the land owner. 15 Taking into consideration the submissions made by the applicants and on behalf of the respondents, noting that the property at Castlecrag had been rented out by the applicants, through a real estate agent, further noting that the applicants had applied for Council Approval to build on the land at Castlecrag on 28 August 2001; and further noting that the Respondent has applied the exemption in Section 10T(4) for the Land Tax Year 2002. I make the following Order: Land Tax is payable by the Applicants in respect of the Land Tax Year 2001 as owners of a property at Northbridge (their principal place of residence) and of a property at Castlecrag. No interest is to be payable on the assessed amount. 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