Ansari v Chief Commissioner of State Revenue

[2006] NSWADT 64

CITATION:	Ansari v Chief Commissioner of State Revenue [2006] NSWADT 64
DIVISION:	Revenue Division
PARTIES:	APPLICANT Nazia Ansari RESPONDENT Chief Commissioner of State Revenue
FILE NUMBER:	056026
HEARING DATES:	28/10/2005
SUBMISSIONS CLOSED:	10/28/2005
DATE OF DECISION:	03/06/2006
BEFORE:	Hole M - Judicial Member
CATCHWORDS:	Duties Act - First Home Plus Scheme - residence requirement
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Duties Act 1997 Taxation Administration Act 1996
CASES CITED:	Adasi v Chief Commissioner of State Revenue (Unreported, 27 September 2004) Ansari v Chief Commissioner of State Revenue [2005] NSWADT 98 Calcaro v Chief Commissioner of State Revenue [2004] NSWADT 158 McKenzie v Chief Commissioner of State Revenue [2005] NSWADT 214 Snow v Chief Commissioner of State Revenue (No 2) [2005] NSWADT 278
REPRESENTATION:	APPLICANT A Ansari, agent RESPONDENT S Benjamin, solicitor
ORDERS:	1. That the decision of the Chief Commissioner of State Revenue to recall the stamp duty concession and to impose interest thereon is affirmed

1 This is an application made by Nazia Ansari (“the applicant”) seeking a review of the decision by the Chief Commissioner of State Revenue to require repayment of the stamp duty concession granted to her in respect of her purchase of a property at Croydon Park together with interest thereon.

2 This application was filed on 23 March 2005. Prior to that date the applicant applied (file number 043411) for a review of the Chief Commissioner of State Revenue’s requirement to repay the First Home Owners Grant which the applicant had received in respect of her purchase. On 6 May 2005 a decision in respect of file number 043411 was published as Ansari v Chief Commissioner of State Revenue [2005] NSWADT 98, the facts relating to this application are identical to those as set out therein. The chronological order of events as set out in paragraph 5 of that decision are set out hereunder for ease of reference:

“(a) on 1 November 2002, the applicant was paid the grant in respect of the unit that she was purchasing. The purchase of the unit was settled on 2 November 2002. The purchase price of the unit was $215,000.00;

(b) on 24 November 2002, the applicant went overseas, to Pakistan, to be married. It was to be a traditional Pakistani marriage, which involved 2 distinct ceremonies. The first ceremony being the religious ceremony and the second ceremony being the journey of the husband and wife to the husband’s home;

(c) after the applicant left for Pakistan and shortly before Christmas of 2002, the applicant’s unit was tenanted;

(d) on 15 January 2003, the applicant was married in a religious ceremony in Pakistan;

(e) following the religious ceremony, the applicant returned to Australia and continued to reside with her parents. On her return, the applicant also lodged, on behalf of her husband, an application for permanent residency. That application was made in March 2003;

(f) the applicant’s husband was granted permanent residency in about November 2003, however he was unable to migrate to Australia at that time as his father had just died;

(g) the applicant returned to Pakistan in April 2004,. After she returned, she and her husband celebrated the second part of their wedding ceremony and she has continued to reside in Pakistan;

(h) the applicant sold her unit in July 2004 for about $251,000.00. The unit had been rented out for the majority of the time she had owned it.”

3 The property was sold on 16 July 2004. The applicant’s representative advised the Tribunal that capital gains tax had been paid on the sale and that the First Home Owners Grant together with a penalty thereon had been repaid and the concession and the interest assessed thereon had been paid.

Jurisdiction

4 Pursuant to the provisions of section 79 of the Duties Act 1997 a determination as to an application for the concession is to be determined solely at the discretion of the Chief Commissioner of State Revenue. The jurisdiction of the Tribunal to consider applications in respect of the concession has been considered in Snow v Chief Commissioner of State Revenue (No 2) [2005] NSWADT 278. In this particular instance the Chief Commissioner of State Revenue had decided that the concession could be made and then, as the applicant had not satisfied the criteria, the Chief Commissioner of State Revenue recalled the concession and required interest to be paid on the assessment. The sequence of granting the concession and then requiring repayment of the concession and imposing penalties is identical to the sequence in Snow (No 2) therefore this Tribunal has jurisdiction to consider this application.

Criteria

5 Pursuant to the provisions of Section 76 of the Duties Act 1997, an applicant for the stamp duty First Home Plus concession, must occupy or intend to occupy the property within 12 months after settlement. This residence requirement is a primary requirement entitling an applicant to apply for the concession and then to retain the concession. The relevant provision being:

“76 Residence requirement

(1) The home must be occupied or intended to be occupied by the person or persons who are acquiring it on or before settlement, or within 12 months after settlement, as the principal place of residence.”

6 Where the home has not been occupied, although the applicant intended to occupy the home within the period required, then the Chief Commissioner of State Revenue may exempt the applicant from the requirement or modify the requirement. The Chief Commissioner of State Revenue has not done so in this case.

Submissions

7 The applicant’s representative submitted that at the time that she made the application for the concession she had a genuine and honest intention to live in the property and to occupy the property within 12 months after settlement. The representative submitted that the applicant’s circumstances changed for reasons beyond her control, that the mortgage instalments on the mortgage needed to be paid each month and that for this reason the property was rented out. The representative also submitted that there was no brochure available at the time of the granting of the concession setting out the requirements of the stamp duty concession or what would be the result, if any, if the requirements were breached.

8 The applicant’s representative also submitted that the applicant had not wished to avoid the circumstances by not advising the Chief Commissioner of State Revenue that she had not complied with the residency requirement. He submitted that she was unaware that she should advise the Chief Commissioner of State Revenue.

9 The representative of the Chief Commissioner of State Revenue submitted that the spirit of the legislation providing for the First Home Plus Concession is set out in sections 76 and 79 and was intended to provide an incentive to people to acquire their first home. The applicant did not have a serious intention to occupy the property as the property was rented out from 2 November 2002 continuously and ultimately it was sold.

Penalty

10 The Chief Commissioner of State Revenue has sought to impose interest on the repayment of the Concession. The interest imposed is intended to address several issues including the fact that the applicant had use of the money until repayment thereof. The interest rate assessed by the Chief Commissioner of State Revenue comprised a penalty rate and market rate. Once again it is appropriate that this interest has been assessed as the applicant had the use of the money for a period of 18 months.

ORDER

1. That the decision of the Chief Commissioner of State Revenue to recall the stamp duty concession and to impose interest thereon is affirmed.