Aspic Holdings Pty Ltd v Chief Commissioner of State Revenue [2009] NSWADT 111

CITATION: Aspic Holdings Pty Ltd v Chief Commissioner of State Revenue [2009] NSWADT 111

DIVISION: Revenue Division

APPLICANT Aspic Holdings Pty Ltd PARTIES: RESPONDENT Chief Commissioner of State Revenue

FILE NUMBER: 086116

HEARING DATES: 4 May 2009

SUBMISSIONS CLOSED: 4 May 2009

DATE OF DECISION: 18 May 2009

BEFORE: Handley R - Deputy President

CATCHWORDS: Land Tax – exemption - land used and occupied for an aged care establishment

Land Tax Management Act 1956 LEGISLATION CITED : Taxation Administration Act 1996 Aged Care Act 1997 (Cth)

Nathan Scott Pty Ltd v Chief Commissioner of State Revenue [2004] NSWADT 122 CASES CITED: Applewood Residential Developments Pty Ltd v CMR of State Revenue [2006] VSCA 207 Commissioner of Land Tax v Christie (1973) 2 NSWLR 526 Lifestyle Retirement Project No 2 Pty Ltd v Chief Commissioner of State Revenue [2008] NSWADT 256

APPLICANT RM Higgins, counsel REPRESENTATION: RESPONDENT AH Rider, counsel

ORDERS: The Respondent's Land Tax assessment is confirmed

REASONS FOR DECISION 1 This matter involves an application by Aspic Holdings Pty Ltd ('the Applicant') for the review of a decision of the Chief Commissioner of State Revenue ('the Respondent') disallowing the Applicant's objection to a notice assessing the Applicant as being liable for the payment of Land Tax on five properties in Mortdale on the ground that the properties were not being used and occupied as an aged care establishment. The Facts 2 The Applicant conducts business as a nursing home under the business name 'Ferndale Gardens Aged Care Facility' ('the nursing home') on land at Jersey Avenue, Mortdale. Between November 2005 and November 2006, the Applicant, with a view to redeveloping the nursing home and upgrading its facilities, settled the purchase of five adjacent properties: 43 and 45 Jersey Avenue and 26, 28 and 30 Milsop Place, on all of which stood private houses at the relevant time. 3 At midnight on 31 December 2005, 43 Jersey Avenue (purchase settled 2 November 2005) was vacant but was subsequently tenanted from 9 February 2006 to 14 December 2007. 28 Milsop Place (purchase settled 8 May 2006) was tenanted from 16 August 2006 to 13 September 2007. Thus, at midnight on 31 December 2006, 43 Jersey Avenue and 28 Milsop Place were tenanted. The other three properties were vacant. 4 From 18 January 2007 to 29 August 2007, 26 Milsop Place (purchase settled 16 November 2006) was tenanted, and from 1 March 2007 to 28 May 2007, 30 Milsop Place (purchase settled 20 October 2006) was tenanted. 5 On 14 December 2007, the builders engaged by the Applicant to redevelop the properties, for which development approval was granted in 2006, took possession of all five properties and fenced them off. Thus, at midnight on 31 December 2007, all five properties were under development. 6 On 14 May 2008, the Respondent issued the Applicant with a Land Tax Notice of Assessment for 43 Jersey Avenue for the 2006 to 2008 Land Tax years and for the other four properties for the 2007 and 2008 Land Tax years. On 14 July 2008, the Applicant signed an Objection to the Land Tax assessment, contending that the land was used and occupied as an aged care facility and was consequently exempt pursuant to s 10R of the Land Tax Management Act 1956 ('the LTM Act'). 7 On 8 October 2008, the Respondent disallowed the objection on the ground that use of the lands for meetings and storage of equipment did not fall within the definition of 'residential care' and therefore did not attract the exemption under s 10R. Moreover, land being developed for an aged care establishment could not be described as being used and occupied as an aged care establishment: Nathan Scott Pty Ltd v Chief Commissioner of State Revenue [2004] NSWADT 122 ('the Nathan Scott case'). On 10 November 2008, the Applicant lodged an application for a review of this decision by the Tribunal. The Relevant Legislation 8 Pursuant to s 100(3) of the Taxation Administration Act 1996, an applicant for review bears the onus of proving his/her case in the Tribunal. 9 Pursuant to ss 7, 8 and 9 of the LTM Act, Land Tax is chargeable on the taxable value of land that is not exempt based on the ownership of the land as at midnight on 31 December of each preceding year for which Land Tax is to be levied. Thus, the Applicant, being the registered owner of the properties in issue, is presumed to be liable for Land Tax based on its ownership of the land on 31 December of each preceding year, unless the land is exempt from tax. The relevant exemption in this matter is that contained in s10R, which states relevantly: 10R Retirement villages - exemption/reduction (1) In this section: "aged care establishment" means: