Sheedy v Chief Commissioner of State Revenue  NSWADT 99
|Date of judgement||23 May 2012||Proceeding No.||116072|
|Judge(s)||Judicial Member A Verick|
|Court or Tribunal||Administrative Decisions Tribunal|
|Legislation cited||Land Tax Management Act 1956 (s.10(1)(r) & Schedule 1A)
Valuation of Land Act 1916
|Catchwords||Land tax exemption - vacant land - principal place of residence exemption - effect of revocation|
|Cases cited||Ambience (Arncliffe) Pty Ltd v Chief Commissioner of State Revenue  NSWADT 206
BBLT Pty Ltd v Chief Commissioner of the Office of State Revenue  NSWSC 1003
Chief Commissioner of State Revenue v Aldridge and Anor (RD)  NSWADTAP 50
Commissioner of Taxation v Ryan (2000) 201 CLR 109
Stature Pty Ltd v Chief Commissioner of State Revenue  NSWADT 271
Tuck v Chief Commissioner of State Revenue  NSWADT 196
Ms Sheedy and Ms Campbell (“the Taxpayers”) sought a review by the Administrative Decisions Tribunal (“the Tribunal”) of assessments issued by the Chief Commissioner of State Revenue (“the Chief Commissioner”) under the Land Tax Management Act 1956 (“the LTMA”) for the land tax years 2004 to 2011 in respect of land situated at Illawong (“the subject land”). The land had been exempted from 2004 to 2011 on the basis that it was the owners’ intended principal place of residence (PPR). In 2011 the Chief Commissioner refused an application by the taxpayers for a further extension of time to build their residence, and issued reassessment notices. Judicial Member Verick decided that the assessments must be confirmed.
The Taxpayers, along with Ms Campbell’s then-partner Mr Curtis, purchased the subject land on 30 September 2003. They were granted an exemption from land tax for the 2004 land tax year under Schedule 1A, clause 6 of the LTMA (“the Concession”) on the basis that they intended to use and occupy the subject land as their principal place of residence once they had built a house on it.
In 2006, the relationship between Mr Curtis and Ms Campbell ended. As part of the settlement between the parties, Mr Curtis transferred his share in the subject land to Ms Campbell.
In early 2007, the Chief Commissioner revoked the Concession under Clause 6(4) of Schedule 1A to the LTMA and issued an assessment for the land tax years 2004 to 2006 in respect of the subject property. An objection against the assessment was disallowed and in 2007 the Taxpayers and Mr Curtis sought a review of the Chief Commissioner’s decision to revoke the Concession. On 22 October 2007, Judicial Member Verick delivered a decision setting aside the objection decision and remitting the matter to the Chief Commissioner for him to reconsider his decision.
Following the decision by Judicial Member Verick, the Chief Commissioner allowed the Taxpayers the Concession for the years 2004 to 2006 and extended the time for completion and occupation of the residence until the end of 2010.
On 21 July 2010, the Taxpayers listed the subject land for sale.
On 29 November 2010, the Taxpayers applied to the Chief Commissioner for a further extension of time to construct their residence and commence use and occupation of the subject land, citing family illnesses as the reason for the further delays.
On 31 May 2011, the Chief Commissioner informed the Taxpayers that their request for a further extension to commence their use and occupation of the subject land had been refused. As a consequence, the Taxpayers were issued with land tax assessments for the 2004 to 2011 land tax years. Objections against these assessments were disallowed by the Chief Commissioner. On 12 September 2011, the Taxpayers filed an Application for a Review in the Tribunal.
The Taxpayers’ Submissions
Ms Sheedy as the agent for the Taxpayers challenged the assessments on two grounds:
The Chief Commissioner had proceeded to issue assessments for the 2004 to 2011 land tax years even though he had advised the Taxpayers’ in writing that they only had a liability for the land tax years 2007 to 2010.
The land valuation used by the Chief Commissioner in the assessments was too high. Ms Sheedy submitted to the Tribunal that the Taxpayers had in each of the relevant years objected to the high valuation given to the subject land but the Valuer General had only reduced the valuation of the subject land for the 2011 land tax year.
Chief Commissioner’s Submissions
The Chief Commissioner submitted that the assessments should be affirmed because the Taxpayers have decided to sell the subject land, and as they have failed to actually use and occupy the subject land as their principal place of residence by the end of the period allowed under Clause 6 of Schedule 1A to the LTMA, the exemption was correctly revoked under Clause 6(5).
The Chief Commissioner further submitted that the effect of the revocation is that the Taxpayers are obliged to pay land tax in relation to the subject land “in respect of any tax years to which, but for the revocation, it would have applied: Clause 6(6)”.
The Tribunal found that the assessments must be confirmed.
Mr Verick referred to the case of Tuck v Chief Commissioner of State Revenue  NSWADT 196 where, in a similar factual situation, the President of the Tribunal in affirming the assessment issued pursuant to Clause 6(6) said:
“... the clear effect of cll. 6(5) and 6(6) is that the PPR exemption is revoked and is taken not to have applied in respect of any year to which, but for the revocation, it would have applied.”
The Tribunal observed that there is no discretion in Clause 6(6), and the provisions require the Chief Commissioner to assess “any year” to which, but for the revocation, the exemption would have applied.
In relation to the Taxpayers’ submission that they were provided with “incorrect advice” of their total land tax liability, the Tribunal concluded that the Chief Commissioner cannot be estopped from administering the LTMA in accordance with its terms and agreed with the Chief Commissioner’s submission in that regard.
As a final comment, the Tribunal observed that a land owner dissatisfied with a valuation determined by the Valuer General has independent rights of review under the Valuation of Land Act 1916. There are no provisions in the LTMA for any review of the valuation determined by the Valuer General. The Chief Commissioner also has no power under the LTMA to substitute any other valuation.