Alldritt v Chief Commissioner of State Revenue [2012] NSWADT 72

Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Alldritt v Chief Commissioner of State Revenue [2012] NSWADT 72 Hearing dates: 26 March 2012 Decision date: 26 April 2012 Jurisdiction: Revenue Division Before: A Verick, Judicial Member Decision: The land tax assessment for the land tax year 2007 is confirmed. Catchwords: Land Tax - principal place of residence exemption - whether land "residential land" with an "excluded occupancy" - principal residence leased and owners in occupation of a studio on the land Legislation Cited: Land Tax Management Act 1956 Taxation Administration Act 1996 Cases Cited: Haddad v Chief Commissioner of State Revenue (RD) [2011] NSWADTAP 35 McGrath and anor v Chief Commissioner of State Revenue [2007] NSWADT 46 Chief Commissioner of State Revenue v McGrath [2008] NSWSC 387 Chief Commissioner of State Revenue v McIlroy [2009] NSWADTAP 21 Chief Commissioner of State Revenue v Ferrington (GD) [2004] NSWADTAP 41 Category: Principal judgment Parties: Farimah Alldritt and Michael Paul Alldritt (Applicants) Chief Commissioner of State Revenue (Respondent) Representation: Counsel AH Rider (Respondent) MP Alldritt (Agent for Applicants) Crown Solicitor (Respondent) File Number(s): 116069

REASONS FOR DECISION 1This is an application made pursuant to s 96 of the Taxation Administration Act 1996 to review an assessment issued by the Chief Commissioner under the Land Tax Management Act 1956 ("the Act") in respect of the 2007 land tax year. The matter in issue relates to the refusal by the Chief Commissioner to grant the applicants a principal place of residence exemption to a property situated at 51 Kooloona Crescent, West Pymble ("the West Pymble property"). 2The applicants purchased the West Pymble property on 30 September 1999 and sold the property on 16 December 2007. 3The West Pymble property constitutes of a main residence and a detached studio. In 2006 the main residence was rented to tenants. The applicants' claim relates to the use and occupation of the studio as their principal place of residence up to sometime in January/February 2007 when they commenced to occupy a residence that they had built on land situated at Green Point ("the Green Point property") purchased on 30 January 2004. 4The applicants had received an occupation certificate for the new dwelling on 1 September 2005 but claim that, for various reasons, they were not able to occupy the Green Point property until January/February 2007. It was claimed that, in 2006 the children and Mrs Alldritt lived with relatives whilst Mr Alldritt used the studio as the applicants' principal place of residence. 5At the hearing, Mr Alldritt represented both the applicants. Written and oral submissions were made by both parties as to the use and occupation of the two properties in the relevant period. But importantly, Mr Rider, counsel for the Chief Commissioner, drew the attention of the Tribunal to a threshold issue that the principal place of residence exemption was not available to the applicants for the West Pymble property for the relevant land tax year "regardless of whether or not it was the Applicants' PPR, on the basis that it had two separate dwellings on it, namely the House (which tenants lived in) and the Studio (which the Applicants allegedly lived in)". Mr Rider referred to Haddad v Chief Commissioner of State Revenue (RD) [2011] NSWADTAP 35 at [10]-[12]; McGrath and anor v Chief Commissioner of State Revenue [2007] NSWADT 46 at [50] - [55] and Chief Commissioner of State Revenue v McGrath [2008] NSWSC 387 at [48]. 6The threshold issue concerns the operation of the main provisions relating to the principal place of residence exemption found in Schedule 1A to the Act. In particular, it was submitted: 33.In such a case, because the House was not, by definition, an "excluded residential occupancy" under cl. 4 of Schedule 1A, West Pymble was not a "parcel of residential land" under cl.3. 34.Therefore, the PPR exemption under cl.2, which relevantly only applies to a parcel of residential land, could not apply to West Pymble for the Tax Year. 35.With respect, the Applicants cannot succeed in this matter due to this threshold issue. In the circumstances, the Tribunal may, with respect, affirm the Assessment for the Tax Year on this basis alone. 7The applicants' response was that they "do not believe" the respondent "in all fairness ... can hide behind the law by using excluded residential occupancy which in all aspects is ridiculous". The applicants also submitted that the "rules need to be applied fairly" and that they had knowledge of other cases where owners were allowed the principal place of residence exemption in similar circumstances.