Lynch v Chief Commissioner of State Revenue [2009] NSWADT 123

CITATION: Lynch v Chief Commissioner of State Revenue [2009] NSWADT 123

DIVISION: Revenue Division

APPLICANTS Lynette Gail Lynch and Peter James Lynch PARTIES: RESPONDENT Chief Commissioner of State Revenue

FILE NUMBER: 096034

HEARING DATES: On the papers

SUBMISSIONS CLOSED: 14 May 2009

DATE OF DECISION: 26 May 2009

BEFORE: Handley R - Deputy President

CATCHWORDS: Land Tax exemption – principal place of residence

LEGISLATION CITED : Land Tax Management Act 1956 Taxation Administration Act 1996

CASES CITED: Chief Commissioner of Taxation v Ferrington [2004] NSWADTAP 41

APPLICANT In person REPRESENTATION: RESPONDENT B Thomson, solicitor

ORDERS: The decision under review is affirmed.

REASONS FOR DECISION 1 Lynette Gail Lynch has filed an application with the Tribunal for the review of a decision of the Chief Commissioner of State Revenue ('the Respondent'), disallowing Ms Lynch's and her husband Peter James Lynch's objection to a notice assessing them as being liable for the payment of Land Tax on their jointly owned property at Ronald Avenue, Greenwich ('the property') on the ground that it was not their principal place of residence ('PPR') at the relevant time. 2 Since Mr and Ms Lynch are joint owners of the property, the Respondent has requested that Mr Lynch be joined as an applicant in these proceedings (submissions paragraph 18). There being no response to this request from Ms Lynch, and noting that the submissions filed by Ms Lynch were signed by both Mr and Ms Lynch, the Tribunal has decided to join Mr Lynch as an applicant. The Facts 3 Mr and Ms Lynch ('the Applicants') purchased the property on 21 August 2000. On 1 January 2006, Mr Lynch entered into a Management Agency Agreement with Blunts Real Estate at Lane Cove authorising Blunts to lease the property for a term of 12 to 24 months. On 17 January 2006, Mr Lynch entered into a Residential Tenancy Agreement with Belinda Maree Forsyth to lease the property to Ms Forsyth for a period of two years from 10 February 2006 at a monthly rent of $4,280. On 1 February 2006, a rental bond of $3,940 was lodged with the Office of Fair Trading. Ms Forsyth vacated the property on 8 February 2008 and the rental bond was refunded on 5 March 2008. 4 On 29 January 2009, the Applicants sold the property and moved to Terrigal, where they currently reside. 5 On 15 December 2008, the Respondent issued a Land Tax notice of assessment for the property for the 2007 and 2008 Land Tax years totalling $8,486.60, and nominating a date for payment of 27 January 2009. Ms Lynch lodged an objection dated 24 December 2008, stating that she and her husband had let their house to cover their costs while they travelled around Australia following their retirement. At no time were they made aware of their potential liability for Land Tax, believing that Land Tax only affected those with more than one property. On 26 January 2009, the Applicants paid $8,366.30, being the full amount reduced by an early payment discount of $120.50. 6 On 4 February 2009, a delegate of the Respondent disallowed Ms Lynch's objection on the ground that the Applicants had not occupied the property as their principal place of residence ('PPR') during the relevant period. On 23 February 2009, Ms Lynch lodged an application for a review of that decision by the Tribunal. The parties agreed that I should deal with this matter 'on the papers'. The Relevant Legislation 7 Pursuant to section 100(3) of the Taxation Administration Act 1996, an applicant for review bears the onus of proving his/her case in the Tribunal. 8 During the relevant period, pursuant to sections 7, 8 and 9 of the Land Tax Management Act 1956 ('the LTM Act'), 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, the Applicants, being the registered owners of the property, were presumed to be liable for Land Tax on that land for the 2007 and 2008 Land Tax years based on their ownership of the land on 31 December of each preceding year, unless the land was exempt from tax. 9 Section 10(1) of the LTM Act 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 1A. 10 'Principal place of residence' is defined 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. 11 Schedule 1A of the LTM Act provides relevantly: 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: