Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Murray v Chief Commissioner of State Revenue [2011] NSWADT 74 Hearing dates: 15 December 2010 Decision date: 08 April 2011 Before: M Hole, Judicial Member Decision: 1.The decision of the Chief Commissioner of State Revenue made on 3 March 2010 in respect of the 5 properties is confirmed. Catchwords: Principal Place of Residence, Primary Production Legislation Cited: Land Tax Management Act (1956) Cases Cited: Murray v Chief Commissioner of State Revenue [2010] NSWADT 214 (26 August 2010) Commissioner of State Revenue v Aldridge [2003] NSWADTAP 50 Downie v Chief Commissioner of State Revenue [2003] NSWADT 223 Cornish Group Pty Limited & Anor v Chief Commissioner of State Revenue [2009] NSWADT 191 A R Thomason v Chief Executive, Department of Lands (1994-1995) 15 QLCR 286 St Pier v Chief Commissioner of State Revenue [2002] NSWADT 112 Ryde Municipal Council v Macquarie University (1978) 139 CLR 633 Tourapark Pty Ltd v FCT (1982) 149 CLR 176, at 181 Newcastle City Council v Royal Newcastle Hospital (1958) 100 CLR 1 Southern Estates Pty Limited v Federal Commissioner of Taxation (1967) 117 CLR 481 FCT v Spotless Services Pty Ltd (1996) 186 CLR 404 McClelland v Goulburn City Council (1976) 35 LGRA 1 Sonter v Commissioner of Land Tax (NSW) (1976) 7 ATR 30 Hope v Bathurst City Council (No 2) (1983) 52 LGRA 79 Greenville Pty Limited v Commissioner of Land Tax NSW (1977) 7 ATR 278 Saville v Commissioner of Land Tax (1980) 12 ATR 7 Abbott v Commissioner of Land Tax (1978) 38 LGRA 417 Hope v Bathurst City Council [1979] 2 NSWLR 471 Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees Union & Ors (1979) 27 ALR 367 Walker v The Valuer-General (1978) 5 QLCR 347 Hope v Bathurst City Council (1980) 144 CLR 1 Category: Principal judgment Parties: John Murray Chief Commissioner of State Revenue Representation: Counsel H El-Hage (Respondent) J Murray (Applicant in person) State Crown Solicitor (Respondent) File Number(s): 106023 reasons for decision 1This is an application by Mr. John Mervyn Murray ("the applicant") in relation to a decision by the Chief Commissioner of State Revenue ("the respondent") made on 3 March 2010 in respect of 5 properties. The applicant is the sole owner of 4 properties being one in Katoomba, two in Merewether and one in Wangi Wangi. He also has a one third ownership of a 5 th property which is in Merewether, the other 2/3 rds are owned by his sisters. For ease of reference to the properties they are referred to as "Katoomba property", "Merewether Duplex", "Wangi Wangi property" and "Merewether House". The applicant resides at the Merewether House and his evidence in relation to this property is referred to at Paragraph 20. The respondent issued a Land Tax assessment on 17 September 2009 in respect of the land tax years 2006, 2007, 2008 and 2009 ("the subject years"). An interlocutory decision was made on 26 August 2010 that: "The Tribunal has jurisdiction to review only the assessment issued on 17 September 2009 for the 2006 - 2009 land tax years" see Murray v Chief Commissioner of State Revenue [2010] NSWADT 214 (26 August 2010). It is useful to set out a description of the properties, the zoning thereof and improvements on those properties: "Katoomba property": There is a house constructed on the property and there is also a flat capable of separate use on the property. Part of the land has been cleared and it is situated on the edge of a State Forest. "Merewether Duplex": These comprise 2 separate parcels of residential land and there is a duplex constructed on each parcel. "Wangi Wangi property": This is a vacant parcel of land, residential premises are constructed on either side of this property. The property fronts on to road and there is a lake to the rear of this property. "Merewether House": This is a residential parcel of land and there is a house on the land. The assessment and decision by the respondent for each of the subject years was on the basis that the Merewether House was the principal place of residence of the applicant and that each of the other properties is subject to land tax. The applicant contends that the Wangi Wangi property is his principal place of residence and that each of the other properties is used in a way that attracts an exemption from land tax. Legislation 2Section 10(1)(r) Land Tax Management Act (1956) ("LTMA") "10 Land exempted from tax (1) Except where otherwise expressly provided in this Act the following lands shall, subject to sections 10B, 10D, 10E, 10G and 10P, be exempted from taxation under this Act: ... (r) land that is exempt from taxation under the principal place of residence exemption, as provided for by Schedule 1A." 3Schedule 1A Clause 12 Land Tax Management Act (1956) "12 Only one principal place of residence for all members of same family (1) For the purposes of the principal place of residence exemption, only one place of residence may be treated as the principal place of residence of all members of the same family. (2) If members of a family own (whether jointly or separately) more than one residence used and occupied by any of them as a principal place of residence , the Chief Commissioner is to treat the one place of residence elected as the principal place of residence of the family as the principal place of residence of all members of the family in respect of a tax year . (3) Such an election is to be made, by or on behalf of the members of the family, in writing and must be lodged with the Chief Commissioner within the period for the lodging of objections under section 89 of the Taxation Administration Act 1996 . (4) An election may be made, in respect of a tax year , by the end of the period allowed for the lodging of an objection to a notice of assessment of land tax liability (being an initial assessment of land tax liability) for that tax year . (5) If an election is not made, the Chief Commissioner is to treat the residence that has the highest land value for land tax purposes as the principal place of residence of all members of the family. (6) For the purposes of this clause , a "family" consists of the following: (a) a person and his or her spouse (if any), (b) any dependent child or dependent step-child of the person and his or her spouse (or of either of them) who ordinarily resides with the person or his or her spouse. (7) A person is the "spouse" of another person if: (a) they are legally married, or (b) the person is the de facto partner of the other person . (8) However, if the Chief Commissioner is satisfied that a person : (a) is legally married to or is in a registered relationship or an interstate registered relationship, within the meaning of the Relationships Register Act 2010 , with another person but not cohabiting with that other person , and (b) has no intention of resuming cohabitation with that other person , the person is not to be regarded as the spouse of that other person and if a dependent child or dependent step-child of the person has a joint interest in the principal place of residence of the spouse, that interest is to be disregarded. (9) A person who is the child or step-child of another person is a "dependent child" or a "dependent step-child" if the person is under 18 years of age and is not legally married. (10) Nothing in this clause prevents more than one residence from being treated as the principal place of residence of members of a family under clause 7 (Concession for sale of former principal place of residence )." 4Section 10AA Land Tax Management Act (1956) "10AA Exemption for land used for primary production (1) Land that is rural land is exempt from taxation if it is land used for primary production . (2) Land that is not rural land is exempt from taxation if it is land used for primary production and that use of the land: (a) has a significant and substantial commercial purpose or character, and (b) is engaged in for the purpose of profit on a continuous or repetitive basis (whether or not a profit is actually made). (3) For the purposes of this section, "land used for primary production" means land the dominant use of which is for: (a) cultivation, for the purpose of selling the produce of the cultivation, or (b) the maintenance of animals (including birds), whether wild or domesticated, for the purpose of selling them or their natural increase or bodily produce, or (c) commercial fishing (including preparation for that fishing and the storage or preparation of fish or fishing gear) or the commercial farming of fish, molluscs, crustaceans or other aquatic animals, or (d) the keeping of bees, for the purpose of selling their honey, or (e) a commercial plant nursery, but not a nursery at which the principal cultivation is the maintenance of plants pending their sale to the general public, or (f) the propagation for sale of mushrooms, orchids or flowers. (4) For the purposes of this section, land is "rural land" if: (a) the land is zoned "rural", "rural residential" or "non-urban" under a planning instrument , or (b) the land is not within a zone under a planning instrument but the Chief Commissioner is satisfied the land is rural land ." Evidence 5The applicant supplied comprehensive and sundry other written material and voluminous evidence by way of written notes and copy tax returns to the Tribunal by way of his evidence. This material was considered carefully, particularly in respect of the claim by the applicant that the properties being the Katoomba property, the Merewether Duplex and the Merewether House were used by him for a Horticulture Business Activity being a Primary Production Activity. Applicant's submissions 6The applicant states that he has a product, being sale of palms that are 8-10 years old and that he has developed the standard of palms at the Merewether House. Then some of those palms are moved to the Katoomba property, from the nursery at the Merewether House to mature. The Katoomba property is located in a cooler area to that of the Merewether property and the applicant contends that they do not grow as well in Katoomba. 7The applicant produced to the Tribunal material in support of his application and brought to the Tribunal examples of young palms grown by him on the property at the Merewether House and subsequently to be moved or had been moved to the property at Katoomba. The copies of the applicant's tax returns for the relevant years were also produced and were included in the Section 58 documents supplied to the Tribunal by the respondent. 8Part of the material produced to the Tribunal by the applicant included copies of various tax returns. The applicant drew attention to the fact that he is recognised by the Australian Taxation Office as entitled to offset his deferred costs and horticultural inputs against his profits. Further that he is able to offset those deferred costs against income that he earns from renting out the Katoomba property and the Merewether Duplex. 9The applicant claimed that the property at Wangi Wangi was to be his principal place of residence and that due to the actions of the local council he was unable to build a home on the Wangi Wangi property. The applicant provided material to the Tribunal disclosing that he had made an application to the local council to build a home on that property. That the local council had approved the construction of a home subject to the applicant undertaking considerable drainage works to prevent runoff from his property into Lake Macquarie. The applicant drew attention to the construction of a house on all other lots in the street where the Wangi Wangi property is situated and that the runoff from those houses and properties is directly into Lake Macquarie. The applicant considers that the costs of the construction of the drainage works required by the local council are prohibitive and inequitable as all other properties have been able to drain in to Lake Macquarie. The applicant has struggled with the local council over considerable years with a view to building on that property. This has occurred over more than 6 years. 10The applicant drew attention to the work that he had undertaken in relation to the Katoomba property and that this was considered as farm improvements. The costs of this work has always exceeded the proceeds of rent that he has received from renting out the house and flat and that the income on the property is a negative income. He indicated that he had established a Waratah plant on the property and that he intended to grow further plants with a view to selling the Waratah blooms. The applicant indicated that he moved palms in pots from the property at the Merewether House to the Katoomba property as they matured and that he had about 80 plants at the Katoomba property. That they would take some time to develop to the stage where they could be sold as 8 - 10 years old. He grows the palms from seed and they are a particular species that he believes will be suitable for marketing at 8 - 10 years of growth. From time to time he uses the flat underneath the house when it is not tenanted. He has from time to time had a caretaker living in the main house and he continues to use the flat under the house for washing and showering. Tenants were there from 2006 to 2008 according to the applicant. The applicant indicated that he wished to cross breed Waratahs although it takes a long time to establish them and that he wants to breed the Waratahs from seeds that are specially selected. 11The applicant drew attention to the continuing discussions over decades that he had with officers of the respondent and that he had produced to the Tribunal a large amount of material which supported his view particularly that he engaged in using land for primary production and that his business enterprise being a horticultural business was recognised by the Australian Taxation Office. He drew attention to having acted in good faith. That the affect of the assessment to land tax had affected his health and that as he was a senior citizen he felt that he was being discriminated against. He noted that he suffered from hypertension and that in the event that he was required to pay land tax due to his lack of funds he would not be able to pay the land tax and would need to raise a loan which at his age would be difficult. 12The applicant indicated that his only source of income was the rental received on the Merewether Duplex. 13The applicant indicated to the Tribunal that the Merewether House is unfit for occupation and that the respondent was incorrect in exempting that house as his principal place of residence. He indicated that he had moved to the Merewether House in 2001 as a temporary residence prior to construction of his home at the Wangi Wangi property. The applicant indicated that the Merewether House has no lighting, no bathroom facilities, no hot water and no laundry facilities, that there are parts of walls and floorboards missing and that the roof leaks considerably when it rains. The applicant indicated that he used the Merewether House to raise the palms from seed and that he had approximately 600 - 650 palms in pots in various stages of growth up to 7 years old although he did move numbers to the Katoomba property when they reached about 2 years of age. The applicant did not produce any material to show the sale of any of the palms. The applicant indicated that he was growing the palms for the purposes of selling them, he did not indicate as to when he had sold any or would sell any. 14The applicant submitted that the land tax is a second income tax and as such was not supportable considering that the Federal government had recognised his claims and had adjusted his income accordingly. He indicated that this was hypothetical however it was possibly a constitutional matter. He indicated that he believed that there was assumed ability or capacity to pay and that he was being specifically targeted. In relation to this he made various submissions concerning taxation of residential property and the assessment on the basis of whether it was unimproved land or not or lived in or not. He also was concerned to draw attention to his view that land tax in real terms is a tax on business which would have the inevitable effect of reducing income. He also considered that land tax imposed on commerce or business stifled that business and was accordingly a restraint of trade. There being no other appeal available to him the applicant indicated that he had no other alternatives than to sell a property or to attempt to get a loan as he had no other income. He considered that the State was gouging anyway. He expressed fear of the State's concomitant legal structure and threat. He indicated that land tax in his circumstances is an unbalanced concept, prohibitive and outrageously excessive, it is based on false premises and is unreasonable and beyond his capacity. Respondent's submissions 15The respondent's representative made various submissions to the Tribunal and provided comprehensive written submissions. The following information was provided. 16The Chief Commissioner of State Revenue issued an assessment on 26 July 2005 requiring the applicant to pay land tax for the 2001 - 2005 land tax years with respect to the 4 properties being the Katoomba property, the Merewether Duplex, the Wangi Wangi Property and the Merewether House. The applicant was granted a principal place of residence exemption on the Merewether House. Following that assessment the applicant corresponded with the respondent concerning his liability for land tax. The applicant returned two further questionnaires to the respondent on 26 October 2005 claiming that he carried on a horticultural business on the Katoomba property and the Merewether House. The respondent suspended the review of the applicant's claim for primary production by way of a letter dated 8 August 2008. Following further correspondence the respondent forwarded an assessment for the land tax years 2006 - 2009 inclusive to the applicant assessing land tax on the Katoomba property, the Merewether Duplex and the Wangi Wangi property, a principal place of residence exemption was granted for the Merewether House. 17Following the issue of the 2006 - 2009 land tax year assessment further correspondence ensued between the applicant and the respondent which resulted in a letter dated 3 March 2010 disallowing the applicant's objection to the 2006 - 2009 land tax year assessments. 18The respondent's representative submitted that the onus was on the applicant to establish that the Wangi Wangi property for the 2006 - 2009 land tax years was the applicant's principal place of residence. That the applicant had to establish that the Wangi Wangi property was the one place that was his principal place of residence, that it was continuously used and occupied by the applicant for residential purposes and no other purpose and the use and occupation was of a building or buildings designed, constructed or adapted for residential purposes. That it is not sufficient that the applicant intended to use and occupy the Wangi Wangi property as his principal place of residence: Commissioner of State Revenue v Aldridge [2003] NSWADTAP 50 at [14] and further that the question of whether the Wangi Wangi property was "used and occupied" by the applicant as his principal place of residence is one of fact and degree to be determined objectively: Downie v Chief Commissioner of State Revenue [2003] NSWADT 223 at [26]. 19In relation to the Katoomba property it was submitted that in order that it be eligible for the primary production exemption in Section 10AA LTMA the applicant must first establish that the relevant activity conducted on the property fell within one of the activities set out in Section 10AA(3) LTMA. The applicant must establish that at the relevant dates being 31 December 2005, 31 December 2006, 31 December 2007 and 31 December 2008 that the answer to each of the following questions is yes in respect of the Katoomba property and the Merewether House: "Assuming the applicant discharges that onus, he must then establish that, as at 31 December 2005, 2006, 2007 and 2008, the answer to each of the following questions is "yes" in respect of the land at the Katoomba Property and the land at 47 Henry Street Property: A) Did the relevant primary production activity constitute the dominant use of the land? B) Did the use of the land for the relevant primary production activity have a significant and substantial commercial purpose or character? C) Was the applicant engaged in the relevant primary production activity for the purpose of profit on a continuous or repetitive basis (whether or not a profit was actually made)? See Cornish Group Pty Limited & Anor v Chief Commissioner of State Revenue [2009] NSWADT 191 ("Cornish"), at [26]." 20The respondent's representative made comprehensive submissions in relation to the meaning of use and dominant use particularly in respect of the following: "A.Although the term "use" is broad, it refers to actual use, not contemplated or intended use. Mere intention to use is not enough: A R Thomason v Chief Executive, Department of Lands (1994-1995) 15 QLCR 286, at 293 (" A R Thomason ") ; Ball , at [43]; St Pier v Chief Commissioner of State Revenue [2002] NSWADT 112; B. "Use" extends to indirect, non-physical or intangible use, such as leasing: Ryde Municipal Council v Macquarie University (1978) 139 CLR 633; C. An owner of land "uses" that land if he or she makes it available for use by others: Tourapark Pty Ltd v FCT (1982) 149 CLR 176, at 181; D. Land may still be "used" even if there is no activity on every part of the land, where retaining the land in its unimproved state is relevant to a particular purpose: Newcastle City Council v Royal Newcastle Hospital (1958) 100 CLR 1, at 4; E. However, worked carried out to prepare the land to be used for primary production does not of itself constitute use of the land for primary production: Southern Estates Pty Limited v Federal Commissioner of Taxation (1967) 117 CLR 481, at 488." As for the meaning of the expression "dominant use": "A."Dominant use" connotes ruling, prevailing, or most influential. The reference in the LT Management Act to a dominant use presupposes that land may be used for more than one purpose and requires a determination of which use of the land is the main, chief or paramount use: Leda , at [69]; FCT v Spotless Services Pty Ltd (1996) 186 CLR 404, at 416. See also McClelland v Goulburn City Council (1976) 35 LGRA 1 in relation to "mainly used"; B. What constitutes "dominant use" is a question of fact and degree. It is to be determined as an objective matter of impression: Leda , at [70]; Sonter v Commissioner of Land Tax (NSW) (1976) 7 ATR 30, at 35; Hope v Bathurst City Council (No 2) (1983) 52 LGRA 79 (" Hope "), at 84 ; C. Generally, a court will consider such matters as the amount of land actually used for any purpose, the nature and extent and intensity of the various uses of the land, the extent to which land is used for purposes which are unrelated to each other, and the time and labour and resources spent in using the land for each purpose. When undertaking this exercise, one cannot ignore the conclusion that an objective observer would reach in viewing the land as a whole: A R Thomason , at 303; Greenville Pty Limited v Commissioner of Land Tax NSW (1977) 7 ATR 278 (" Greenville "), at 280 ; D. In order for a use of the land to constitute the "dominant use", it is necessary not only that the use prevail over any competing use but also that it be sufficiently substantial to prevail over the proposition that the land is primarily to be regarded as unused land: Saville v Commissioner of Land Tax (1980) 12 ATR 7, at 10; E. It is generally not sufficient to inquire whether some difference can be discerned between the uses to justify classing one as the main use or predominant use. The predominance must be of such a degree as to impart a character to the parcel as a whole: Abbott v Commissioner of Land Tax (1978) 38 LGRA 417, at 422-423 (" Abbott "); Although income is a relevant consideration in determining the question of "dominant use", it should not be relied on as the primary determinant: A R Thomason , at 304." 21The use of the land must have a significant and substantial commercial purpose or character: "This criterion, in s. 10AA(2)(a) of the LT Management Act , was considered in Cornish . The words "significant" and "substantial" are defined in the Macquarie Dictionary (3 rd ed.), relevantly as follows: Significant ... 1. important; of consequence. Substantial ... 1. Of a corporeal or material nature; real or actual. 2. Of ample or considerable amount, quantity, size, etc...... 3. of considerable amount, quantity, size, etc... 3. of solid character or quality; firm, stout, or strong. .... 6. of real worth or value In Hope v Bathurst City Council [1979] 2 NSWLR 471, Samuels JA considered that the word "significant" should be understood to mean "important", or "real", or "genuine", or "weighty": at 477. The term "substantial " was considered by the Court in Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees Union & Ors (1979) 27 ALR 367. Bowen CJ (with whom Evatt J agreed) and Deane J cautioned that the term was capable of having more than one meaning and imports notions of relativity: see Bowen CJ, at 374-375 and Deane J, at 382. Their Honours' interpretation of the term more or less reflected the dictionary definition. As for the requisite commercial element, the Land Appeal Court of Queensland said in A R Thomason (at 305): ....."Commerce" includes the interchange of goods or commodities or services, especially on a large scale, and trade or business. The relevant "purpose" is the "object to be attained, thing intended" (Australian Concise Oxford Dictionary) or, in other words, the "object for which anything...is done...an intended or desired result; end or aim" (Macquarie Dictionary). In this context (and by contrast with "character") the word "purpose" seems to be subjective in nature or at least have a subjective component. So for the business or industry to have a commercial purpose there must be some intention or desire on behalf of those engaged in the business or industry to pursue commercial goals rather than merely be engaged in the enterprise for recreational or some other purpose.......The word "character" has a more objective connotation, being "the aggregate of qualities that distinguish one person or thing from others" (Macquarie Dictionary). The commercial character of a business or industry could be ascertained by reference to a range of criteria quite independently of the intention of desire of those engaged in the business or industry of their goals. In Walker v The Valuer-General (1978) 5 QLCR 347, the Land Appeal Court examined the meaning of the term "business" within the expression "the business of primary production". The Court considered that a "business" constitutes an activity with a significant commercial purpose or character. In that context, the Court said (at 354): All activities of a primary producing nature do not constitute a "business". There must, therefore, be some necessary elements or attributes attaching to the activities which bring them within the meaning of the term "business" as it is commonly understood. Profit or lack of profit is not in itself the deciding criterion .....There must, in my opinion, be continuity, diligence and repetition of actions constituting the activities and, moreover, the operations must have some significant commercial purpose or character - a degree of substantiality or viability although not necessarily always profitable. Alternatively, the actions or operations in train at the relevant date of valuation must be such that given favourable seasons and conditions they are of such magnitude that they will, in the fullness of time, by maturity or further activity reasonably be expected to develop into a viable venture. In short, I cannot accept that the scale of operations or activities are not a significant factor in determining whether or not they are to be classed as a business. Based on the dictionary definitions and the authorities referred to above, the words "significant" and "substantial" convey some thing of real importance, worth or value. Thus, to fall within s. 10AA(2)(a), the relevant primary production activity must have a demonstrable degree of commercial sustainability and viability. It must also be on a scale and intensity which results in, or is intended to realise, a profit. As such, o nly real, genuine and serious operations would satisfy the criterion in s. 10AA(2)(a). An activity of a lesser scale and intensity is insufficient. The activity must be engaged in for the purpose of profit on a continuous or repetitive basis (whether or not a profit was actually made): "Although the requirement in s. 10AA(2)(b) of the LT Management Act was considered to a limited extent in Cornish , the Chief Commissioner is not aware of any other case where that provision has been examined in detail. This criterion requires an applicant to establish that the primary production activities are conducted with a profit motive, although the applicant does not need to show that a profit was actually made continuously. The criterion picks up the requirement, specified by Mason J in Hope v Bathurst City Council (1980) 144 CLR 1, at 8, of a need for the activities to be undertaken "as a commercial enterprise in the nature of a going concern". Thus, to satisfy this criterion, an applicant must establish that he or she is carrying on a viable and self sustaining enterprise. " 22The respondent's representative submitted that the material provided and the submissions made by the applicant were insufficient to discharge the onus upon him to support his claim that his horticultural business constituted primary production activity within the meaning of Section 10AA(3) of LTMA. 23The material before the Tribunal supports the conclusion that the Merewether House was the applicant's principal place of residence during those years as: "A.The applicant recorded 47 Henry Street as his address on various correspondence and submissions sent to the Chief Commissioner and on submissions filed with the Tribunal (indeed, that address recorded on the Application); B. The applicant recorded 47 Henry Street as his address in tax returns lodged with the Australian Taxation Office for the financial years ending 30 June 2006, 2007, 2008 land 2009; C. 47 Henry Street is recorded as the applicant's residential address on records held by the Department of Lands; D. 47 Henry Street was recorded as the applicant's residential address on the NSW Electoral Roll during the 2006-2009 land tax years; E. 47 Henry Street was recorded as the applicant's residential address with Energy Australia and the Hunter Water Corporation during the 2006-2009 land tax years; F. 47 Henry Street was recorded as the applicant's residential address with the Roads and Traffic Authority during the 2006-2009 land tax years; G. 47 Henry Street was recorded as the applicant's residential address in various documents produced by Walkom Linehans First National Real Estate which fall within the 2006-2009 land tax years." 24The respondent's representative submitted that the Wangi Wangi property being vacant land could not be claimed to be the applicant's principal place of residence. Reasons for decision 25The recognition of the activities of the applicant by the Australian Taxation Office does not affect nor can it affect the land tax liability of the applicant. It may be that the Australian Taxation Office would consider payment of land tax in relation to a business, however, this Tribunal is concerned about the imposition of land tax imposed by the New South Wales government. Accordingly the argument raised by the applicant on the basis that the Australian Taxation Office accepts his horticultural business as relevant can only be relevant to the imposition of land tax if in fact that activity satisfies the exemptions provided in Section 10AA LTMA. For the reasons set out herein the properties being the Katoomba property, the Merewether Duplex and the Wangi Wangi property cannot be exempt from land tax and therefore land tax is payable thereon in accordance with assessments made by the respondent. 26The Wangi Wangi property remains vacant land. The local council has considered and provided approval to constructing a home on that property subject to certain conditions. The applicant has chosen not to comply with those conditions and has sought to have them varied to allow him to construct the house without the provision of drainage as required. This is a matter of choice of the applicant. The applicant's choice does not change the liability of the vacant land to be assessed for land tax. Therefore that Wangi Wangi property is assessable for land tax and has been assessed accordingly by the respondent. 27The evidence produced to the Tribunal by way of rental records and also the comments by the applicant indicate that the dwellings on the Katoomba property are rented out for profit albeit insufficient to cover the applicant's costs on the property. The Katoomba property is not eligible to be exempt from land tax under any of the exemptions available for property. It is a property owned by the applicant and it is ineligible for an exemption pursuant to Section 10AA LTMA as the dominant use is for the residence to be rented. There is no evidence provided that would allow the land to be considered to be land used for primary production. Therefore the Katoomba property is assessable for land tax and has been assessed accordingly by the respondent. 28The applicant disclosed his address on the application as the Merewether House. The applicant did not provide any evidence as to any property other than the Wangi Wangi property being used as his principal place of residence. The Wangi Wangi property is vacant land and the applicant did not indicate any other property that was his principal place of residence. The onus is on the applicant to establish his principal place of residence for the purposes of exemption from land tax. Notwithstanding this the respondent has exempted the Merewether House on the basis that the respondent considers this to be the principal place of residence of the applicant. In the absence of the discharge of the onus that rests on the applicant to prove that a particular property is his principal place of residence and on the basis that the respondent has exempted Merewether House as the principal place of residence of the applicant then the exemption so provided is recognised by the Tribunal and the exemption sought by the applicant in respect of the Wangi Wangi property is not available to him. Therefore the exemption of the Merewether House made by the respondent is correct. 29Every written submission provided by the applicant has been carefully considered. The applicant has not discharged the onus required in relation to the claims that he has made that the Wangi Wangi property is his principal place of residence. The applicant has not discharged the onus of providing sufficient proof that the Katoomba property and the Merewether House are used for the purposes of the business that would be then exempt pursuant to Section 10AA LTMA. 30The applicant has not discharged the onus to provide evidence that any of the properties are used for the purposes that would allow an exemption pursuant to the provisions of Section 10AA LTMA. 31The applicant's main submissions relied on his having had his submissions to the Australian Taxation Office in relation to his income which were successful. The fact that the applicant may have persuaded the Australian Taxation Office to allow him to offset costs in running the business he claims does not affect the imposition of land tax on the properties. To enable an exemption to be provided as sought by the applicant there would need to be sufficient evidence to show that: (a) the Katoomba property and the Merewether House were used and that the dominant use was for the business which was capable of being exempt pursuant to Section 10AA LTMA; (b) that the Merewether Duplex was exempt pursuant to any provision in the LTMA. This property is rented out and clearly no exemption is applicable; and (c) the Wangi Wangi property being vacant land and notwithstanding the struggles that the applicant has had with the local council concerning the ability to construct a residence thereon that has not occurred and the applicant's endeavour to undertake that enterprise over a period in excess of 6 years. 32The applicant has tried valiantly to provide evidence that supports his view that his properties ought to be exempt from imposition of land tax. He has not discharged that onus and it is my opinion that the Merewether House is the applicant's principal place of residence, the Katoomba property and the Merewether Duplex are used for the purposes of rental income and the Wangi Wangi property remains vacant land and until such time, while the applicant is the owner thereof, it will remain subject to imposition of land tax until a residence is constructed thereon and is occupied by the applicant. ORDERS 1.The decision of the Chief Commissioner of State Revenue made on 3 March 2010 in respect of the 5 properties is confirmed. ********** 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. Decision last updated: 08 April 2011