Ford v Chief Commissioner of State Revenue [2009] NSWADT 192

CITATION: Ford v Chief Commissioner of State Revenue [2009] NSWADT 192

DIVISION: Revenue Division

APPLICANT Simon John Ford PARTIES: REPSONDENT Chief Commissioner of State Revenue

FILE NUMBER: 096005

HEARING DATES: 3 July 2009

SUBMISSIONS CLOSED: 3 July 2009

DATE OF DECISION: 22 July 2009

BEFORE: Handley R - Deputy President

CATCHWORDS: Land Tax exemption – principal place of residence

Land Tax Management Act 1956 LEGISLATION CITED : Taxation Administration Act 1996 Interpretation Act 1987 Duties Act 1997

Ryan & anor v Commissioner of Land Tax [1982] 1 NSWLR 305 Chief Commissioner of State Revenue v Coleman [2007] NSWSC 625 CASES CITED: Chief Commissioner v McGrath [2008] NSWSC 387 Chief Commissioner of State Revenue v Sacco [2008] NSWADTAP 61Castle v Chief Commissioner of State Revenue [2008] NSWADTAP 62Aoun Investments v Chief Commissioner of State Revenue [2006] NSWSC 1394 Chief Commissioner of State Revenue v Timbs [2006] NSWADTAP 25

APPLICANT S Ingate, solicitor REPRESENTATION: RESPONDENT I Mescher, counsel

ORDERS: The Land Tax assessments under review are confirmed.

REASONS FOR DECISION 1 Simon Ford ('otherwise referred to as the Applicant') has applied to the Tribunal for the review of decisions of the Chief Commissioner of State Revenue ('the Respondent'), disallowing Mr Ford's objections to notices assessing him as being liable for the payment of Land Tax on a property in Greenwich on the ground that it was not his principal place of residence at the relevant times. Background 2 Mr Ford and his wife, Julie Ford, purchased a property at 5 George Street, Greenwich in their joint names in November 1993. In September 1995, they transferred the property into Mrs Ford's name alone. In September 1996, Mr Ford purchased 1 George Street. In September 1999, he purchased the adjacent property 1 Gother Avenue, and in November 2004, he purchased 3 George Street. These four properties comprise the land at the corner of George Street and Gother Avenue, Greenwich. 3 Initially, Mr and Mrs Ford and their children occupied 5 George St as their family home. Mr Ford was then posted to London by his employer, and he and his family were absent from Sydney, living in London, for some years, returning in about January 2006. On their return, they recommenced living at 5 George St where they have lived ever since. Mr and Mrs Ford have four children, and the reason for Mr Ford purchasing the adjacent properties was to enable him and his wife to extend the house and garden of 5 George St. After discussions with an architect, a preliminary development application to extend the house at 5 George St onto the land at 3 George St was lodged with the Council on 28 March 2006. Initially, excess furniture that could not be accommodated in 5 George St was stored in the house at 3 George St. In late June 2006, Mr Ford engaged a contractor to demolish the house at 3 George St, and the demolition of the house and the clearance of the site were completed by August 2006. In April 2007, the house at 1 Gother Ave was also demolished. 4 The development application for the extension of 5 George St was approved by May 2007 and excavation of the site commenced on 20 June 2007. Building work continued through 2008 and was finally completed by late December 2008. On 2 July 2009, the Council issued an interim occupation certificate. 5 On 18 July 2007, the Department of Lands registered the consolidation of the parcels of land for 3 and 5 George St and 1 Gother Ave as lot 2 in DP (Deposited Plan) 1112148. The consolidation was a requirement of the Council. 1 George St was not included in the consolidation and continues to be identified separately as lot 1 (although there appears to have been a small adjustment of the boundaries between the former 3 George St and 1 George St). The title to lot 2 was held by Mrs Ford as to the part formerly comprising 5 George St and by Mr Ford as to the part formerly comprising 3 George St and 1 Gother Ave. Mr Ford holds the title to lot 1 (1 George St). 6 On 30 June 2008, Mr Ford transferred that part of lot 2 formerly comprising 3 George St together with that part formerly comprising 1 Gother Ave to himself and Mrs Ford as joint tenants, and Mrs Ford transferred 5 George St to herself and Mr Ford as joint tenants, thereby consolidating the title to lot 2 in DP 1112148 so that Mr and Mrs Ford became the registered owners of the whole of lot 2 as joint tenants. 7 On 15 January 2007, the Office of State Revenue ('OSR') issued a Land Tax notice of assessment to Mr Ford for the 2007 Land Tax year, which was subsequently varied and re-issued on 19 March 2007. The OSR refused Mr Ford's request for a principal place of residence ('PPR') exemption for 3 George St. (A notice of assessment issued to Mrs Ford on 17 January 2007 granted a PPR exemption for 5 George St.) Mr Ford's objection to his assessment, lodged on 19 February 2008, was not accepted as a valid objection on the ground that it was out of time. It was, however, treated as a request for a reassessment of tax liability pursuant to s 9 of the Taxation Administration Act 1996 ('TAA'), but that request was disallowed on 6 May 2008 on the ground that there was no unity of title between 1 Gother Ave and 3 and 5 George St. 8 On 16 June 2008, the OSR issued a Land Tax notice of assessment to Mrs Ford for the 2008 Land Tax year granting a PPR exemption in respect of 5 George St. 9 On 18 June 2008, Mr Ford lodged an objection to the OSR's decision of 6 May 2008 (in respect of the 2007 Land Tax year), which was disallowed on 25 July 2008. 10 On 30 July 2008, the OSR issued a Land Tax notice of assessment to Mr Ford for the 2008 Land Tax year, refusing the grant of a PPR exemption for 3 George St (which as of 31 December 2007 incorporated 1 Gother Ave). Mr Ford's objection to this assessment, lodged on 4 September 2008, was disallowed on 14 November 2008. 11 On 13 January 2009, Mr Ford applied to the Tribunal for a review of both the 2007 and 2008 Land Tax assessments. The Relevant Legislation 12 Pursuant to section 100(3) of the TAA, an applicant for review bears the onus of proving his/her case in the Tribunal. 13 The applicable provisions of the Land Tax Management Act 1956 ('the LTMA') were identical for the 2007 and 2008 Land Tax years in issue in this case. Pursuant to sections 7, 8 and 9 of the LTMA, Land Tax was chargeable on the taxable value of land that was not exempt based on the ownership of the land as at midnight on the 31 December of each preceding year for which Land Tax was to be levied. Thus, Mr Ford, being the registered owner of 3 George St, was presumed to be liable for Land Tax on that land for the 2007 and 2008 Land Tax years based on his ownership of the land on 31 December of each preceding year, unless the land was exempt from tax. 14 Section 10(1) of the LTMA provides, relevantly, that except where otherwise provided in the Act, certain lands shall be exempted from taxation under the Act, including: (r) land that is exempt from taxation under the principal place of residence exemption, as provided for by Schedule 1. 15 The following definitions are included in section 3(1): " principal place of residence " of a person means the one place of residence that is, among the one or more places of residence of the person within and outside Australia, the principal place of residence of the person. "Joint owners" means persons who own land jointly or in common, whether as partners or otherwise, and includes persons who have a life or greater interest in shares of the income from the land and persons who by virtue of this Act are deemed to be joint owners. 16 Schedule 1A of the LTMA provides relevantly: Part 1 - Preliminary 1 Definitions (1) In this Schedule: "principal place of residence exemption" – see clause 2. "residential land" - see clause 3. "strata lot" means a lot under the Strata Schemes (Freehold Development) Act 1973 or the Strata Schemes (Leasehold Development) Act 1986 . "taxing date" - means midnight on the thirty-first day of December. (2) For the purposes of this Schedule, a reference to the owner of land includes, if there are joint owners, any one or more of those joint owners. Part 2 - Principal place of residence exemption 2 Principal place of residence exemption (1) Land used and occupied by the owner as the principal place of residence of the owner of the land, and for no other purpose, is exempt from taxation under this Act, in respect of the year commencing 1 January 2005 or any succeeding year, if the land is: