Aronstan v Chief Commissioner of State Revenue
[2008] NSWADT 8
•7 January 2008
CITATION: Aronstan v Chief Commissioner of State Revenue [2008] NSWADT 8 DIVISION: Revenue Division PARTIES: APPLICANT
Aronstan
RESPONDENT
Chief Commissioner of State RevenueFILE NUMBER: 076085 HEARING DATES: 05/10/2007, 30/10/2007 SUBMISSIONS CLOSED: 30 October 2007
DATE OF DECISION:
7 January 2008BEFORE: Verick A - Judicial Member CATCHWORDS: Land tax exemption - principal place of residence MATTER FOR DECISION: Principal matter LEGISLATION CITED: Land Tax Management Act 1965 (NSW)
Administrative Decisions Tribunal Act 1997 (NSW)
State Revenue Legislation Further Amendment Act No 80 of 2003 (NSW)CASES CITED: Loizos v Carlton and United Breweries Ltd (1994) 94 NTR 31
Moonee Valley City Council v Quadry Industries Pty Ltd [1999] VSC 95
Union Fidelity Trustee Company Ltd v Federal Commissioner of Taxation (1969) 119 CLR 177
Penrith Rugby League Club Ltd v Commissioner of Land Tax [1983] 2 NSWLR 616
Kidston Goldmines Ltd v Commissioner of Taxation (1991) 30 FCR 77
White & Anor v Chief Commissioner of State Revenue [2007] NSWADT 241
Smith v Chief Commissioner of State Revenue [2005] NSWADT 170 Wilks v Chief Commissioner of State revenue [2002] NSWADT 248
Deane v Commissioner of Stamp Duties (Qld)(No2) [1996] 2 Qd R 557
Zakariya v Chief Commissioner of State Revenue [2003] NSWADT 26REPRESENTATION: I Young, barrister
A Rider, barristerORDERS: The decision under review is affirmed
Introduction
1 The applicants seek a review of the Chief Commissioner’s decision to disallow their objection to land tax assessments that the Chief Commissioner issued to Mr Aronstan in his own right and to the applicants jointly in respect of land owned by the applicants situated at Bulga Road, Dover Heights, New South Wales (“the property”) for the 2004 land tax year.
2 The issue in this matter is whether the property was exempt from land tax in the tax year under the “concession for unoccupied land intended to be owner’s principal place of residence” pursuant to Clause 6 of Schedule 1A to the Land Tax Management Act 1956 (NSW) (“the LTM Act”).
Factual Background
3 The relevant factual background is not in dispute and is as follows.
4 The applicants are migrants from South Africa who arrived in Australia in February 2002 and until January 2003 resided in rental accommodation.
5 The applicants purchased the property in April 2002. At the time of the purchase there was an existing dwelling on the property. The existing dwelling “was a 45 years old and badly run down” dwelling. Upon purchase of the property, the applicants commissioned architects to prepare plans, obtain necessary approvals and oversee all construction work to renovate the existing dwelling on the property into a modern dual occupancy.
6 On 27 December 2002, Mr Aronstan entered into a contract to purchase a unit situated at Isabel Avenue, Vaucluse, New South Wales (“the Vaucluse residence”) and on settlement of the purchase on 15 January 2003, the applicants moved out of their rental accommodation and occupied the Vaucluse residence.
7 In March 2003, Mr Aronstan purchased a unit situated at Greenoaks Avenue, Darling Point, New South Wales as an investment property, which has been rented to tenants since its purchase.
8 In October 2004, following completion of the renovations to the dwelling on the property converting it into a two storey dual occupancy, the applicants moved into the first floor of the property and have continued to resided there. At the same time, in October 2004, Mr Aronstan rented out the Vaucluse residence to tenants. Since January 2005, the ground floor unit of the property has been let to tenants.
9 The “events leading to these proceedings” have been summarised by the Chief Commissioner in the following paragraphs of his written submissions:
10 In addition to the documents made available by the respondent under section 58 of the Administrative Decisions Tribunal Act 1997 (NSW), the applicants lodged affidavits. In Mr Aronstan’s affidavit dated 23 August 2007, (which was endorsed and adopted by Mrs Aronstan), in addition to providing the above factual background, Mr Aronstan also stated that:
13. On 16 May 2006, the Respondent wrote to Mr. Aronstan regarding land tax for the 2005 tax year and the Darling Point Unit. The letter enclosed a Land Tax 2005 - Registration Form (Form) and a ‘Land Tax 2005 Factsheet’.
14. Mr Aronstan completed and returned the Form to the Respondent on or about 6 July 2006. In the Form, Mr. Aronstan provided details of the land that he currently owned, being 50% of the Property and 100% of the Vaucluse Residence and the Darling Point Unit.
15. On 27 July 2006, the Respondent issued a Land Tax Notice of Assessment in respect of his 50% ownership of the Property and his 100% ownership of the Vaucluse Residence and the Darling Point Unit for the 2004, 2005 and 2006 Land Tax Years for the total amount of $8,047.15. The Respondent also wrote to the Applicants on 27 July 2006 and issued a Land Tax Notice of Assessment in respect of the Property for ‘$0.00’ for the 2006 Land Tax Year.
16. On 28 September 2006, Mr. Aronstan’s accountant (Accountant) wrote to the Respondents objecting to the imposition of land tax on the Vaucluse Residence for the 2004 Land Tax Year on the basis that as at 31 December 2003, the property was Mr. Aronstan’s principal place of residence and accordingly should be exempt from land tax (First Objection).
17. Following investigations and receipt of the Applicants’ utility bills, the Respondent wrote to the Accountant on 18 December 2006 and allowed the First Objection on the basis that a ‘Principal Place of Residence (PPR)’ exemption applied to the Vaucluse Residence. The letter also stated that a ‘PPR exemption is currently on the property known as 15 Bulgra (sic) Rd, Dover Heights, this took effect from 1 November 2004’. The letter attached an amended assessment to Mr. Aronstan which (among other things) reflected the PPR exemption for the Vaucluse Residence for the 2004 Land Tax Year and the removal of the PPR exemption for, and imposition of land tax on, the Property for the 2003 and 2004 Land Tax Years. The letter also attached an amended assessment to the applicants which imposed land tax on the Property for the 2003 and 2004 Land Tax Years for the total amount of $19,699.00.
18. On 20 February 2007, the Applicants’ solicitors (Solicitors) wrote to the Respondent in respect of the Applicants’ land tax obligations. In that letter, the Solicitors asserted that the Vaucluse Residence was not at any time exempt from land tax and that the Property was exempt from land tax as the Applicants’ intended principal place of residence. The Solicitors concluded the letter by stating that it was their clients’ wish that the letter be treated as an objection against any assessment or assessments which levied land tax on the Property (Second Objection).
19. On 23 May 2007, the Respondent wrote to the Applicants advising of his decision to allow the Second Objection (in so far as it related to the assessment of land tax on the Property for the 2003 Land Tax Year) on the basis that s.10T of the LTMA applied to exempt the Property from land tax. The Respondent also advised the Applicants (in so far as the Second Objection related to the 2004 Land Tax Year) that the claim to exempt the Property under clause 6 of Schedule 1A of the LTMA was precluded by subclause 6(7)(a), which provides that the exemption does not apply where the owner is entitled to have their use and occupation of another property considered for a principal place of residence exemption. The Respondent stated in the letter that the evidence available demonstrated that the Vaucluse Residence was entitled to be considered for the principal place of residence exemption and, consequently, the Property was not exempt (Decision). The Respondent’s letter attached the respective land tax reassessments.
20. On 20 June 2007, the Applicants filed a Notice of Application in the Administrative Decisions Tribunal (Tribunal) for a review of the Respondent’s Decision (Application for Review). The Application for Review stated that the reasons for seeking a review were:
“The decision in respect of the 2004 year by OSR in which it refused to treat the property at Bulga Rd, Dover Heights as a principal place of residence of the applicant is incorrect both in law and fact and having regard to the provisions of Sch. 1 Clause 6 of the Land Tax Administration Act (sic).”
11 A further affidavit was filed by Mr Aronstan on 30 October 2007 in which he states as follows:
“19. For the purposes of our land tax liability, my wife and I have always intended, regarded and elected that the Bulga Road property was and should be treated as our permanent home at all times since we purchased it in or about April 2002.
20. To that end, the representation in my accountant’s letter to the Commissioner dated 28 September 2006, appearing at tab 5 of the Commissioner’s Documents, to the effect that, for land tax purposes, the principal place of residence exemption for the 2003 and 2004 tax years should attach to Isabel Avenue property is erroneous and wrong. My wife and I disclaim, renounce and withdraw any such claim. In that respect my wife and I adopt what is said in our objection dated 20 February 2007 appearing at tab 14 of the Commissioner’s Documents.
21. My wife and I recognize and accept that both the Greenoaks Avenue property and the Isabel Avenue property are fully liable to land tax and my wife and I make no present claim and relinquish any claim whatsoever to exemption from land tax in respect of those properties.”
Relevant Legislative Provisions
“2. We purchased the Bulga Road property with the intention of renovating the property and using and occupying the property as our home. When I say our home, I mean as a permanent home for my wife Beverley and I and our children then aged in 2004 32 and 28 respectively. That was the only intention we ever had, to occupy it after renovation as our family home.
3. The street address is 13-15 Bulga Road and it is held on the one title. It is two storey place with upstairs and downstairs area. The downstairs area can be locked off from the upstairs and can be separately accessed from the street and has its own bathroom and kitchen. It was my intention and also that of my wife that the downstairs would be occupied by our children and Beverley and I would live upstairs.
4. It is my understanding that for local government and development approval purposes the property is classified as a dual occupancy. However as I have explained above, that was to enable our children to live in a self contained manner in the downstairs area.
5. However, in the period between purchasing Bulga Road and completing the renovations, both my children were married and neither of them wanted to move in the downstairs area. Accordingly in or about January 2005 the downstairs was rented out.”
12 By the combined effect of sections 7, 8, and 9 of the LTM Act, land tax is levied each year on land value of all land in New South Wales owned at midnight on the thirty-first day of December immediately preceding the year for which the land tax is levied other than land which is exempt from taxation under the LTM Act.
13 Section 10 of the Act sets out various categories of land that enjoy exemption from land tax under the LTM Act. So far as it is relevant in relation to the “principal place of residence exemption”, the exemption under s 10(1)(r) is in the following broad terms:
14 The “principal place exemption” is fully expanded in clause 2 of Schedule 1A to the LTM Act, which relevantly for the land tax year under review, provided that:
“ 10. Land exempted from tax
(1) Except where otherwise expressly provided in the 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.”
15 Clause 6, relevant for purposes of this matter, provides a principal place of residence exemption to an owner who acquires either vacant land to build his or her principal place of residence or purchases an existing residence, which requires refurbishment. In the relevant land tax year, clause 6 was in the following terms:
“(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 2004 or any succeeding year, if the land is:
(2) Land is not used and occupied as the principal place of residence of a person unless:
(a) a parcel of residential land, or
(b) a lot under the Strata Schemes (Freehold Development) Act 1973 or a lot under the Strata Schemes (Leasehold Development) Act 1986.
(3) If the owner of land is entitled to the exemption conferred by this clause, no other person is liable to be assessed for taxation under this Act in respect of the land during the period of the owner’s entitlement to the exemption.
(a) the land, and no other land, has been continuously used and occupied by the person for residential purposes and for no other purposes since 1 July in the year preceding the tax year in which land tax is levied, or
(b) In any other case, the Chief Commissioner is satisfied that the land is used and occupied by the person as the person’s principal place of residence.
(4) The exemption conferred by this clause is referred to as the “principal place of residence exemption”.”
16 Clause 12, also relevant in this matter, restricts the principal place of residence exemption to only one principal place of residence for all members of the same family. It provides as follows:
“ 6. Concession for unoccupied land intended to be the owner’s principal place of residence
(1) If the Chief Commissioner is satisfied that the owner of unoccupied land intends to use and occupy the land solely as his or her principal place of residence, the owner is taken, for the purposes of the principal place of residence exemption, to use and occupy that land as his or her principal place of residence.
(2) This clause does not apply unless the Chief Commissioner is satisfied that:
(3) This clause applies in respect of the assessment of a person’s ownership of land only in the period of:
(a) the land is unoccupied because the owner intends to carry out, or is carrying out, building or other works necessary to facilitate his or her intended use and occupation of the land as a principal place of residence, and
(b) if those buildings or other works have physically commenced on the land, no income has been derived from the use and occupation of the land since that commencement, and
(c) the intended use and occupation of the land is not unlawful.
(4) The Chief Commissioner may extend the period in which this clause applies if satisfied that:
(a) 2 tax years immediately following the year in which the person became owner of the land, or
(b) if the land is used and occupied for residential purposes by a person other than the owner at any time after the person became owner, 2 tax years immediately following the tax year in which the building or other works necessary to facilitate the owner’s intended use and occupation of the land are physically commenced on the land.
(5) If the principal place of residence exemption applies by operation of this clause to land not actually used and occupied by a person as his or her principal place of residence on a taxing date, that exemption is revoked if the person fails to actually use and occupy the land as his or her principal place of residence by the end of the period in which this clause applies in respect of the assessment of the person’s ownership of the land to continue to so use and occupy the land for at least 6 months.
(a) there is a delay in the completion or, in a case referred to in subclause (3)(b), the commencement of the building or other works necessary to facilitate the owner’s intended use and occupation, and
(b) the delay is due primarily to reasons beyond the control of the owner.
(6) The effect of the revocation is that the principal place of residence exemption is taken not to have applied to the land in respect of any tax year to which, but for the revocation, it would have applied. Land tax liability is to be assessed or reassessed accordingly.
(7) This clause does not apply in respect of land owned by a person if:
(8) For the purpose of this clause:
(a) the person or any member of the person’s family (within the meaning of clause 12) is entitled to have his or her actual use and occupation of other land taken into account under section 9C or under this Schedule. or
(b) the person or any joint owner of the land owns land outside New South Wales that is the principal place of residence of the person or joint owner, or
(c) the land, or other land if combined with any adjoining land of which the person is an owner, is capable of having more than 2 residences or residential units lawfully built on it.
unoccupied land means land that is not being used or occupied for any purpose.”
Submissions
“ 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 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:
(7) A person is the “spouse” of another person if:
(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.
(8) However, if the Chief Commissioner is satisfied that a person:
(a) they are legally married, or
(b) they are living together as a couple in a de facto relationship within the meaning of the Property (Relationship) Act 1984.
(9) A person who is the child or step-child of another is a “dependent child” or a “dependent step-child” if the person is under 18 years of age and is not legally married.
(a) is legally married to 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.
(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).”
17 The applicants’ case is essentially that the applicants were entitled in respect of their property to the concession for principal place of residence exemption under the combined effect of clauses 6 and 12 of Schedule 1A to the LTM Act in the relevant year.
18 On behalf of the applicants, Mr Young submitted that the policy of Schedule 1A was as follows:
19 In relation to the facts of the case, Mr Young submitted that the current Schedule 1A operated as follows:
“14. Section 10(1)(r) of the Act, as it currently stands, exempts from land tax “land that is exempt from taxation under the principal place of residence exemption, as provided for by Schedule 1A”.
15. Schedule 1A was introduced by State Revenue Legislation Further Amendment Act No 80 of 2003 and effective from 1/1/2004. The Explanatory Note for State Revenue Legislation Further Amendment Bill 2003 says in the Overview section that its object is to:
16. The underlying policy was revised, and not merely recycled. The limitation to first home buyers who were renting was discontinued. The Explanatory Note in its discussion of the PPR exemption states:
“amend the Land Tax Management Act 1956 to re-act and revise the principal place of residence exemption and for other purposes.”
Schedule 4 [5] and [11] repeal and replace the exemption granted under the Act for a person’s principal place of residence. In particular, changes made which:
17. That, with respect, is the correct statement of current policy. The restriction in the old section 10T(3)(a) and (b) is gone and not replaced. An election is given to families to select one property as their PPR, where they are establishing “ a new family residence ” whether by building or renovating.”
…
(a) remove certain restrictions for the current exemption for land on which a new family residence is being built or an existing residence is being refurbished,
…
(e) allow each family, including dependents under 18, a concession for only one property, except when buying a new principal residence and selling their existing residence.
20 In relation to the election under clause 12 of Schedule 1A, it was submitted that under the provision “a family is given a specific election as to which property they wish to nominate as their PPR”. The applicants claim that they are a “family” as defined and by lodging an objection to the relevant assessment made the necessary election under clause 12 which it was contended “open to them by operation of the deeming provisions” set out in subclause 6(1).
“19. Paragraph 2(1) of Schedule 1A of the Act establishes an exemption in respect of “ land used and occupied by the owner as the principal place of residence of the owner of the land, and for no other purpose ”.
20. Thus, the operative concept of paragraph 2(1) is land “used and occupied” as the PPR. In the 2004 tax year (as at midnight 31/12/2003) the Applicants did not occupy the Bulga Road property. But paragraph 6(1) of Schedule 1A states:
21. This was presently the case. At all material times, it was the Applicants’ intention to subsequently occupy the Bulga Road land as their principal place of residence.
“ An owner of unoccupied land is entitled to claim the land as his or her principal place of residence, if the owner intends to use and occupy the land solely as his or her principal place of residence. In such a case, the owner is taken, for the purpose of the principal place of residence exemption, to use and occupy unoccupied land as his or her principal place of residence. ”
22. Paragraph 6(2) of Schedule 1A states:
23. Paragraph 6(3) of Schedule 1A states:
“This clause does not apply unless:
(a) the land is unoccupied as the owner intends to carry out, or is carrying out, building or other works necessary to facilitate his or intended use and occupation of the land as a principal place of residence, and
(b) if those buildings or other works have physically commenced on the land, no other income has been derived from the use and occupation of the land since that commencement, and
(c) the intended use and occupation of the land is not unlawful.”
All of paragraphs (a) and (b) and (c) are presently satisfied.
The Bulga Road property was purchased in April 2002.
“This clause applies in respect of the person’s ownership of land only in the period of:
(a) two tax years immediately following the year in which the person became owner of the land, or
(b) if the land is used and occupied for residential purposes by a person other than the owner at any time after that person became owner, 2 tax years immediately following the tax year in which the building or other works necessary to facilitate the owners intended use and occupation of the land had physically commenced on the land.”
24. The exemption is claimed in respect of the 2004 year; that is not a year more than two years following the year in which the Applicants became the owners of the Bulga Road property.
25. Paragraph 6(5) of Schedule 1A states:
26. This is not presently the case; the Applicants occupied the Bulga Road property as their principal place of residence in or about October 2004 and have continued to occupy that place as their principal place of residence to today’s date.
“ If the principal place of residence exemption applies by operation of this clause the land not actually used and occupied by a person as his or her principal place of residence on a taxing date, that exemption is revoked if the person fails to actually use and occupy the land as his or her principal place of residence by the end of the period in which this clause applies in respect of the assessment of the person’s ownership of the land and continue to so use and occupy the land for at least 6 months .”
27. Paragraph 6 (7) of Schedule 1A states:
“This clause does not apply in respect of land owned by a person if:
28. The Commissioner, so it seems, relies upon paragraph 6(7)(a) to deny the Applicants’ claim and in particular the words “ is entitled to have his or her actual use and occupation of other land taken into account under … this Schedule ”.
(a) the person or any member of the person’s family (within the meaning of clause 12) is entitled to have his or her actual use and occupation of other land taken into account under section 9C or under this Schedule; or
(b) the person owns land outside New South Wales that is the principal place of residence of the person or a member of the person’s family (within the meaning of clause 12); or
(c) the land, or the land if combined with any adjoining land of which the person is an owner, is capable of having more than 2 residences or residential units lawfully built on it.”
29. What the Applicants say in response is that by a proper reading of paragraph 12 and consequent upon the exercise of the choice or election provided for in paragraphs 12(2) and (3), they are no longer “entitled” to have the actual use of Isabel Avenue taken into account.”
21 Mr Young submitted that under the deeming provisions found in subclause 6(1) the applicants “are taken and deemed to, ‘use and occupy the unoccupied land as [their] principal place of residence’ for all, and not merely some of, the purposes of the principal place of residence exemption.” In support of this proposition, reliance was placed by counsel on statements made by the authors (Pearce and Geddes) in the fourth edition of Statutory Interpretation in Australia and the following cases (Loizos v Carlton and United Breweries Ltd (1994) 94 NTR 31 at 32 per Kearney, Angel and Mildren JJ, Moonee Valley City Council v Quandary Industries Pty Ltd [1999] VSC 95 at paragraph [23] per Balmford J and Union Fidelity Trustee Company Ltd v Federal Commissioner of Taxation 91969) 119 CLR 177 at 187 per Kitto J in relation to the effect of deeming provisions.
22 Counsel also referred the Tribunal to cases (Penrith Rugby League Club Ltd v Commissioner of Land Tax [1983] 2 NSWLR 616, at 622 per Hunt J and Kidston Goldmines Ltd v Commissioner of Taxation (1991) 30 FCR 77 at 79 Hill J) to submit that a concession or exemption of the kind under review “should not be construed narrowly” and that the construction advocated by the Chief Commissioner was “the narrowest and most pedantic”.
23 Essentially, Mr Young sought to rely on the recent decision handed down by Judicial Member Greenwood in White & Anor v Chief Commissioner of State Revenue [2007] NSWADT 241. Mr Young appeared for the applicants in that case and had made similar submissions, which were accepted by the Tribunal. It was submitted that the Tribunal should have regard to this decision in determining this matter.
24 The Chief Commissioner placed a great deal of reliance on subclause 6(7) of Schedule 1A in submitting that the applicants were not entitled to an exemption in relation to the property for the 2004 land tax year. Mr Rider, counsel for the Chief Commissioner, developed this submission in his written submissions as follows:
25 The Chief Commissioner’s response to the submission made by the applicants that clause 12 allows them to make an election, is that clause 12 “is an anti-avoidance provision, the policy and intent of which is to restrict the application of the PPR exemption to one place of residence per family in cases where members of the same family own, use and occupy multiple residences as their respective principal places of residence”. The Chief Commissioner also rejects the applicants’ argument that the Chief Commissioner’s construction of the provisions are “narrowest and most pedantic” on the grounds that the cases cited by the applicants’ counsel in support are neither relevant nor do they assist to establish that the Chief Commissioner’s interpretation of clauses 6 and 12 is incorrect.
“51. The construction of the intended PPR exemption, and in particular the effect of cl 6(7) of Schedule 1A, was considered in Smith v Chief Commissioner of State Revenue [2005] NSWADT 170, where Judicial Member Hole held at cl. 10:
52. Based on the above, the Respondent submits that his construction of the intended PPR exemption in this case, particularly that cl.6(7)(a) applied to deny the Applicants’ “claim” for an exemption for the Property in the Tax Year, was correct. In this regard, the Respondent submits that he is correct in construing that cl.6(7)(a) is enlivened if the objective fact of a person’s (or a family member’s) actual use and occupation of other land as at midnight on 31 December in a tax year is relevant to a provision of Schedule 1A. That is, the Respondent submits that it is correct to say that the existence of this objective fact and its relevance to a provision of Schedule 1A is what determines whether a taxpayer is “entitled to have his or her actual use and occupation of other land taken into account under Schedule 1A”.
“ … the applicants had been granted an exemption in respect of … their principal place of residence and that it was clear that the [other] property was intended to be their principal place of residence . The exemption available pursuant to Schedule 1A Clause 6(7) of the [LTMA] is only available in respect of one residential property. This exemption is not available in respect of two residential properties simultaneously. ” (emphasis added)
53. The Respondent also submits that it is important to note that the width of the words “taken into account” mean that the objective fact of a person’s actual use and occupation of other land does not need to satisfy all of the relevant requirements of a provision of Schedule 1A, but merely that the objective facts are a relevant consideration in relation to (but not necessarily determinative of) a provision of Schedule 1A.
54. In this case, the evidence shows that Mr. Aronstan actually used and occupied the Vaucluse Residence as his principal place of residence as at midnight on 31 December 2003. On this basis, the Respondent submits that this objective fact enlivened cl.6(7)(a) (because it was relevant to the PPR exemption under Schedule 1A) and that cl.6(7)(a) then operated by its terms to deny the operation of cl.6(1), such that the Applicants were not deemed to have used and occupied the Property as their principal place of residence. The result was that the Property did not fall under any of the exemption provisions of Schedule 1A, specifically the intended PPR exemption or the PPR exemption, because the Applicants did not actually use and occupy the Property, nor were they deemed to have used and occupied the Property, as their principal place of residence in the Tax Year.
55. Further, while it may be the case, as the Applicants submit, that the Applicants otherwise satisfied the relevant requirements of cl.6, the Respondent submits that once cl.6(7)(a) was enlivened, cl.6 simply did not apply to the Property by force of the terms of cl.6(7). In this regard, the respondent submits that’s cl.6, by its terms, and consistent with the general operation of the exemption provisions of the LTMA, either applies to the subject land by force of the objective facts to the terms of the LTMA or it does not. The Respondent submits that there is no subjective election provision under cl.6. That is, the operation of cl.6 is purely driven by the application of the objective facts to the words of the legislation.”
26 At the hearing, the Tribunal was concerned that the applicants were and did in fact end up building a dual occupancy on the property and raised the issue whether this, in any way, affected the application of clause 6 in this matter. Counsel for the applicants submitted that it did not and that the Tribunal should only take into account the original intention of the applicants to occupy the completed building as their principal place of residence for themselves and their children.
Findings and reasons for decision
27 The applicants’ principal contention is that the combined effect of clauses 6 and 12 of Schedule 1A to the Act allows an owner who is in the process of refurbishing a residence to be used and occupied as his or her principal place of residence to nominate that residence as his or her principal place of residence for the principal place of residence exemption notwithstanding that the owner was in occupation of another property as his or her principal place of residence on the relevant taxing date. It follows, in the applicants’ contention, that in relation to the facts of this matter, the applicants were in the relevant land tax year entitled to make an election to nominate the property as their principal place of residence.
28 The Tribunal does not accept this contention. The construction suggested by counsel in respect of the provisions of clauses 6 and 12 and accepted in White & Anor v Chief Commissioner of State Revenue, is in the opinion of the Tribunal, not in accordance with the correct interpretation of the relevant provisions dealing with the principal place of residence exemption as set out in Schedule 1A.
29 Counsel for the applicants has submitted that the Tribunal should apply the decision of the Tribunal in White & Anor v Chief Commissioner of State Revenue in this matter. The Tribunal agrees with counsel that, although the decision is not binding on this Tribunal, the Tribunal should only disregard the decision if there are good and valid reasons.
30 In White & Anor v Chief Commissioner of State Revenue the applicants on the relevant taxing date, 31 December 2005, were living in an apartment, which they owned in Coogee and which was their principal place of residence on that date. They had also acquired another property, a residence in Point Piper in January 2004 which had been let until about May 2005 when the applicants commenced to carry out substantial building renovations to the residence. It was not until early August 2006 that the applicants occupied the Point Piper residence as their principal place of residence. The applicants were assessed in respect of the Point Piper residence for the 2006 land tax year and received an exemption for the Coogee apartment.
31 The Chief Commissioner disallowed the applicants’ objection to the assessment on the grounds that they were not entitled to the concession under clause 6 because they were disqualified for the concession under subclause 6(7)(a). The applicants had submitted that they came within the clause 6 concession and the deeming provisions found in subclause 6(1) allowed them to make an election under clause 12 to nominate the Point Piper residence under going refurbishment at the relevant time as their principal place of residence. The Tribunal accepted this submission.
32 The Judicial Member accepted (in paragraph 36) the submission made by counsel for the applicants that, under the deeming provisions found in subclause 6(1), the “applicants are taken and are deemed to ‘use and occupy the unoccupied land as [their] principal place of residence’ for all and not merely some of, the purposes of the principal place of residence exemption as part of the transitional procedure contemplated by the legislation. The Judicial Member went on in paragraph 37 to conclude as follows:
33 In rejecting the Chief Commissioner’s contention that subclause 6(7) applied because the applicants were on the relevant taxing date using and occupying the Coogee property as their principal place of residence, the Judicial Member made the following statement:
“Because the applicants are deemed, for all the purposes of the PPR exemption, “to us and occupy” the Point Piper property as their PPR, the applicants also made the election under paragraph 12(2) of Schedule 1A by their intention to purchase the Point Piper property as their intended residence and further clarified it as their election set out in their notice of objection against their 2006 assessment of land tax that their Point Piper property should be treated as their principal place of residence and as part of the transitional process the applicants are deemed and taken to use and occupy the Point Piper land as their PPR for all purposes of the PPR exemption.”
34 The Judicial Member’s understanding of the scheme relating to the principal place of residence exemption under Schedule 1A to the LTM Act is best reflected in her conclusion in paragraph 47 of the decision:
“40 … This argument is somewhat circular and would appear to improperly subvert the intention of parliament to provide protection for property owners in transition to a new residential property that requires building work and it is rejected by the Tribunal because S6(7) and S12 would appear to deal with couples together and couples separated and multiple members claiming separate exemptions for jointly held properties, some of which may be interstate and this aspect is specifically mentioned in the 2003 second reading speech.
41 … the Tribunal agrees with the construction urged by the Applicants representative that S 6(7) has no application to the context of the Applicants’ circumstances as transitional home owners moving from one home to their next. Clearly, the intention of Parliament to protect transitional home owners and the reference to “continual use” or occupation to ground entitlement to principal residence exemption cannot cut down that entitlement by circuitous reliance on continuous occupation of one property, before the moving into the next one. This view is further supported by the fact that a reference to the word “continuously” does not appear in clause 12 of Schedule 1A at all. The phrase “continuously occupied and used” appears in clause 2(2)(a) of Schedule 1A, but that clause is further qualified by clause 6 which talks about concessions for unoccupied land intended to be an owners principal place of residence and hence the concept of deeming is brought into operation as it must be conceptually to allow for the transition to a new residence as contemplated by parliament.”
35 That is, in the opinion of the Tribunal and with respect to the Judicial Member, a serious misunderstanding of the way the exemption under Schedule 1A operates. A person is not given the choice of selecting or to “pick and choose” a residence as his or her principal place of residence under Schedule 1A with the exception of families which have more than one principal place of residence. To prevent “double dipping”, the principal place of residence exemption in the case of a family with more than one principal place of residence, is confined to only one principal place of residence exemption for the whole family.
“47 A right to make an election is given to families to select one property as their PPR, except where they are buying and selling, which is not the case here. The Applicants submit that their claim is in fact consistent with the policy underlying the PPR exemption in Schedule 1A. The policy simply is that a person cannot obtain more than one exemption from land tax and a concession was allowed whereby taxpayers could elect which was their PPR. That is what the Applicants have sought to do.”
36 And also subject to one exception, the principal place of residence exemption is only available in respect of one residence. The legislative provisions restrict the “principal place of residence” exemption to one residence, except when a person is buying a new principal place of residence and selling his or her former residence that has been used as a principal place of residence. This concession is provided under clause 7 and recognised in subclause 12(10). Subclause 12(10) ensures that the provisions of clause 12 do not affect the special concession given pursuant to clause 7.
37 The principal place of residence exemption under Schedule 1A of the LTM Act must be read in conjunction with the definition of the expression “principal place of residence of a person” found in s 3(1) of the LTM Act. The expression “principal place of residence of a person” is defined to mean “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”.
38 This is clearly an objective test and the conclusion is determined by considering the extent and quality of use and occupation of a residence in each case. The definition requires that only one residence can be regarded as the principal place of residence of a person. In Deane v Commissioner of Stamp Duties (Qld)(No 2) [1996] 2 Qd R 557 Fryberg J in considering the meaning of “principal place of residence’ in the context of the Stamps Act 1894 (Qld) held that the issue should be determined on an objective basis and proceeded to make the following relevant comments:
39 In Zakariya v Chief Commissioner of State Revenue [2003] NSWADT 26 the Tribunal in the context of first home grants legislation, also held that “the subjective intention” of a person did not bring an applicant within the eligibility criteria if the person did not in fact reside in the property as his or her principal place of residence. It is necessary that the original subjective intention of a person does in fact come to fruition for the original subjective intention to be accepted. The original intention, in any case, does not play a dominant role in the final determination of a person’s principal place of residence.
“It also seems to me that the word “principal” in the definition allows a wide range of factors to be taken into account, and also implies an objective test of what is the principal place of residence. That is not to say that the intention of the person acquiring the residence is not relevant. Indeed, Mr Logan for the Commissioner conceded that intention could be taken into account as a factor in the assessment. It seems to me that intention is relevant, but not dominant. That view of the law also seems to me substantially to be the test which was applied by the respondent in the present case …
The evidence regarding the applicant’s mail, their usage of electricity, the electoral roll, the time they spent at Dewar Terrace compared with the time which they spent at Weinholt Street, the number of nights slept at each place, all combines to found a proper inference as to what was their place of abode or their residence – to put it another way, the place where their home was …
The fact of the matter is that the legislation requires more than just a purpose of acquisition, and it does not seem to me that they did enough to bring themselves within the terms of the Act.”
40 Schedule 1A was introduced by State Revenue Legislation Further Amendment Act No 80 of 2003 and became operative from 1 January 2004. The Minister’s Explanatory Note to the Bill that introduced the legislation stated the object of the new Schedule 1A was to “amend the Land Tax Management Act 1956 to re-enact and revise the principal place of residence exemption”.
41 The principal provision dealing with the exemption is found in clause 2 of Schedule 1A. In particular, subclause 2(2) provides that land is not used and occupied as the principal place of a person unless “(a) the land, and no other land, has been continuously used and occupied by the person for residential purposes and for no other purposes since 1 July in the year preceding that tax year in which land tax is levied, or (b) in any other case, the Chief Commissioner is satisfied that the land is used and occupied by the person as the person’s principal place of residence”.
42 There are essentially two tests available to an owner. The first is where the owner is able to demonstrate the required “continuous use and occupation” of the residence to obtain the exemption. This is an objective and factual test. Where an owner is not able to satisfy the “continuous use and occupation” test due to absence from his or her place of residence or any other reason, the Chief Commissioner is given a discretion to consider all the circumstances surrounding the quality of the use and occupation of the relevant property to determine whether it is used and occupied by the person as his or her principal place of residence. For example, the absence of an owner as a result of a long business or holiday trip would under the first test fail to obtain the concession in respect of his or her principal place of residence. The discretion allows the Chief Commissioner to disregard temporary absences in determining whether the residence is the principal place of residence. The principal place of residence of a person is determined on the basis of the quality of use and occupation of a place of residence by a person.
43 The exemption is generally only given to an owner in respect of a residence that is actually used and occupied by the owner. But the provisions have been extended to an owner of unoccupied land who intends to use the land solely as his or her principal place of residence. Clause 6 deals with this concession in respect of land on which a new family residence is being built or an existing residence is being refurbished. The concession given by clause 6 is only available to an owner if the all the requirements, in particular those set out in subclauses 6(2) and 6(7), are satisfied.
44 Subclause 6(2) sets out three requirements that the Chief Commissioner has to be satisfied before an owner is entitled to the concession under clause 6. Firstly, the owner has to show that he or she intends to carry out, or is carrying out, building or other works necessary to facilitate his or her use and occupation of the vacant land or the refurbishment of a newly acquired residence as his or her principal place of residence. Secondly, if those building or other works have physically commenced, the owner has to confirm that he or she has not derived any income from the use or occupation of the land since that commencement. Thirdly, the intended use and occupation of the land must be lawful.
45 In his submissions, Mr Young for the applicants strongly argued that the underlying policy of the predecessor provisions relating to the principal place of residence exemption in the LTM Act “was revised, and not merely recycled” when they were replaced by Schedule 1A to the LTM Act. It is not difficult to reject that submission. Schedule 1A was introduced incorporating the old principal place of residence exemption provisions into a single code dealing with the exemption. The Minister in his Explanatory Note to the bill that introduced Schedule 1A, indicated that the proposed legislation would “repeal and replace the exemption granted under the Act for a person’s principal place of residence”. The Minister went on to state that the proposals also contained some changes, which so far as relevant for this matter, included the following:
46 The predecessor provision to clause 6 was section 10T. Subclause 6(2) replaced subsection 10T(2) which read as follows:
“(a) remove certain restrictions for the current exemption for land on which a new family residence is being built or an existing residence is being refurbished,
(e) allow each family, including dependents under 18, a concession for only one property, except when buying a new principal residence and selling their existing residence”.
47 Subclause 6(2) reintroduced these provisions but used clearer language and strengthened the disqualifying factors to avoid any abuse of the concession. In that sense, counsel for the applicants is correct that the old provisions were not merely “recycled”. But the new disqualifying factors, which included the old, certainly have more “teeth” to prevent any abuse of the concession. Obviously, lessons learnt from the administration of the old provisions would have assisted in drafting the new provisions.
“(2) This section does not apply unless:
(a) the land is within a residential zone under a planning instrument or, if not within a zone under a planning instrument, is land that the Chief Commissioner is satisfied is to be used for residential purposes, and
(b) the Chief Commissioner is satisfied that the intended use and occupation is not unlawful, and
(c) while the owner is the owner, the land is not used or occupied except as his or her principal place of residence.”
48 Subclause 6(7) sets out a further and quite critical requirement to be satisfied before the owner of vacant land or a residence acquired for refurbishment is entitled to the concession for the principal place of residence exemption under clause 6. The concession is not available if:
49 Subclause 6(7) simply denies the concession available under clause 6 if the person seeking the concession owns another residence within or outside New South Wales, which is on the relevant taxing date being used and occupied as the principal place of residence of the person. The subclause also prevents an owner of land, if the land or in combination of any adjoining land is capable of being developed, to have either two residences or residential units.
(a) the person seeking the concession or any member of the person’s family (within the meaning of clause 12) is entitled to have his or her actual use and occupation of another residence or property taken into account under section 9 of the LTM Act in respect of a flat or under Schedule 1A of the LTM Act, or
(b) the person or any joint owner of the land owns land outside New South Wales that is the principal place of residence of the person or joint owner, or
(c) the land, or the land if combined with any adjoining land of which the person is an owner, is capable of having more than 2 residences or residential units lawfully built on it.
50 In the present matter, the Chief Commissioner has denied the concession on grounds that subclause 6(7), in particular paragraph (a), applies to the applicants. The predecessor of subclause 6(7)(a) was subsection 10T(3)(a) which provided as follows:
51 The effect of the proviso in s 10T(3)(a) was considered by the Tribunal in Wilks v Chief Commissioner of State Revenue [2002] NSWADT 248 where Judicial Member Block held at paragraph 19 as follows:
“the person or any joint owner of the land is entitled to have his or her actual use and occupation of other land taken into account under section 9C or 10(1)(r)”.
52 The test considered in Wilks is similar to the current test found in subclause 6(7)(a) and the provisions of subclause 6(7)(a) apply in the same manner. If, an owner has another residence which is his or her principal place of residence in the relevant year for purposes of Schedule 1A, then the concession under clause 6 is not available to that owner. Judicial Member Block’s observations would thus equally apply to the operation of subclause 6(7)(a). The language of the subclause is clear and the concession is simply denied to an owner who is in occupation of another property, which for purposes of Schedule 1A is his or her principal place of residence on the relevant taxing date.
“… The concession under section 10T was available only where the Applicant was not entitled to an exemption for another property under section 10(1)(r) and the plain fact is that he was so entitled in respect of the McMahons Property in relation to the relevant year. This is so having regard also to section 3(3)(a) of the Act and the fact that property had been “continuously used and occupied … for residential purposes” since the preceding 1 July. The McMahons Property may at that time and from the Applicant’s subjective point of view have been owned by him on a temporary basis in the sense that he intended to sell it at a convenient time thereafter but that is not the point. The plain fact is that once the McMahons Property qualified for the section 10(1)(r) exemption in relation to the relevant year (and it clearly did) then and in respect of the Castlecrag Property the section10T concession was not available.”
53 As observed by Judicial Member Block in Wilks it does not matter that, from an owner’s subjective point of view the occupation of a particular residence is on a temporary basis after the purchase of another property, which is intended to be the future principal place of residence. The fact that a property has been continuously used and occupied and is regarded as the principal place of residence will only cease to be the principal place of residence of a person when he or she ceases to continuously use and occupy the property.
54 Subclause 6(7) has been considered by the Tribunal in Smith v Chief Commissioner of State Revenue [2005] NSWADT 170. The applicants in that case had bought a property for their retirement at Coal Point and on the relevant taxing date they were carrying out extensive renovations but remained resident in their principal place of residence in Cessnock. The land tax liability on the Coal Point property was far greater than that which would have been payable on the Cessnock property. The Tribunal accepted the Chief Commissioner’s submission that pursuant to subclause 6(7) the exemption was only available for the Cessnock property. The Tribunal in passing made the following rather important and relevant observation:
55 A great deal of reliance was placed by the applicants in White & Anor v Chief Commissioner of State Revenue and in the present matter on the operation of clause 12. Clause 12, as correctly submitted by counsel for the Chief Commissioner, has been inserted as an anti-avoidance provision to prevent a family from obtaining more than one principal place of residence exemption from land tax.
“13 There is no legislative facility or discretion available to reassign the location of the principal place of residence to minimise the land tax assessable, …”
56 The provision is designed to apply where a family uses or occupies more than one place of residence as their principal place of residence. This could arise in a number of situations. For example, a city apartment may be used by part of a family as their principal place of residence and is owned by one spouse, whilst the rest of the family use and occupy a suburban residence owned by the other spouse as their principal place of residence. In the absence of clause 12, both properties would be entitled to the principal place of residence. In fairness to other owners of land in New South Wales, this clause restricts the exemption to only one residence for a family. Under this clause, the family is allowed to nominate by way of an election one property as their principal place of residence for purposes of the exemption under the LTM Act.
57 Clause 12 is not a provision that enables an owner of two or more residences to nominate one of the residences for purposes of the principal place of residence exemption. The residence that is used and occupied by a person, as his or her principal place of residence has to be determined by an objective test having regard to all the facts and surrounding circumstances. A person can have only one residence as his or her principal place of residence. It is only in the case of a family that two or more residences may qualify as the principal place of residence of the family members when taken into account as a group. As indicated above, clause 12 confines the exemption to only one property in such cases.
58 In relation to clause 12 the Judicial Member in White & Anor v Chief Commissioner of State Revenue correctly accepted that-
59 But having said that, the Judicial Member, for reasons that are difficult to distil from the decision, proceeded to accept the submission of the applicants that they could make an election under clause 12 to nominate their more expensive Point Piper property as their principal place of residence. Clause 12, as indicated, above has a special role. The clause has been inserted in Schedule 1A to restrict the exemption to one property for each family subject to, of course, establishing that the family uses and occupies more than one residence as their principal place of residence. That was not the case before the Tribunal.
“34 This clause was included as evidenced by the second reading speech to restrict tax minimisation practices of transfers between family members and that is not the situation in this case and both the applicants are married and cohabitate as the one family and jointly own both the Point Piper property and unit 5 at Coogee”.
60 Having examined the application of the relevant provisions generally and as applied in White & Anor v Chief Commissioner of State Revenue, it is necessary to consider the analysis against the facts in this matter.
61 In this matter, there are some significant factual differences from the facts in White & Anor v Chief Commissioner of State Revenue that also affect the applicants’ claim for the exemption in respect of the property. The property was purchased by the applicants with the intention that it should be the “permanent home in Australia” for themselves and their children aged in 2004, 32 and 28 respectively. The applicants commissioned architects “to prepare plans and secure all relevant approvals and oversee all construction so as to renovate into a modern dual occupancy” on the property.
62 Under subclause 6(1) the concession for unoccupied land intended to be the owner’s principal place of residence is only available if the owner intends to use and occupy the land solely as his or her principal place of residence. It is important to note that in “determining an application for a review of a reviewable decision, the Tribunal”, under s 63 of the Administrative Decisions Tribunal Act, “is to decide what the correct and preferable decision is having regard to the material then before it”, including any factual material and any applicable written or unwritten law. (Emphasis added)
63 The Tribunal is entitled to consider the actual events that occurred when the property was ready to be used and occupied. At that time there were clearly two residential units on the property. The applicants’ both children got “married and neither wanted to move in the downstairs area” and “in or about January 2005 the downstairs was rented out”. What is important is that the property was a council approved dual occupancy with two residential units. Whatever the subjective intention might have been at the stage when the property was purchased, effectively when the property was ready for use and occupation, one of the two residential units was rented to tenants.
64 This matter can, therefore, be distinguished from White & Anor v Chief Commissioner of State Revenue. In this matter, the applicants did not build a residence on the property solely as their principal place of residence. They built two residential units on the property. The applicants simply did not qualify pursuant to the necessary conditions set out in subclause 6(1) to the concession available to owners under clause 6. Subclause 6(7)(c) would apply in this case to deny the applicants the concession. Under subclause 6(7)(c), the concession under clause 6 is not available to a person if “the land, or the land if combined with adjoining land of which the person is an owner, is capable of having more than 2 residences or residential units lawfully built on it”. In this matter, the applicants obtained council approval for the dual occupancy and had their architects refurbish the property into two independent residential units.
65 However, common with White & Anor v Chief Commissioner of State Revenue, the applicants were on the relevant taxing date resident in their Vaucluse residence, which was used and occupied by the applicants as their principal place of residence. Counsel for the applicants referred to the Vaucluse residence as their temporary residence and the property as their permanent residence. The scheme under Schedule 1A does not refer to such kind of residences and nothing turns on such descriptions. Ultimately, the principal place of residence of a person at a particular time is determined on an objective basis. The actual use and occupation of the Vaucluse residence, in terms of subclause 6(7)(a), had to be properly taken into account by the Chief Commissioner under Schedule 1A in determining the applicants’ principal place of residence. The applicants had used and occupied the Vaucluse residence as their principal place of residence from January 2003 until about October 2004. On the relevant taxing date, 31 December 2003, the applicants’ principal place of residence was the Vaucluse residence and on that date they were carrying out renovations to the property, which was to be their principal place of residence only in October 2004.
66 The Chief Commissioner was in those circumstances entitled to deny the applicants under subclause 6(7)(a) or (c) the concession available under clause 6. I agree with the Chief Commissioner’s submission that once subclause 6(7)(a) “was enlivened” clause 6 simply did not apply to the property.
67 The construction suggested by the Chief Commissioner and accepted by the Tribunal is not “the narrowest and most pedantic” as submitted by counsel for the applicants. The relevant terms of subclause 6(7)(a) are clear and have been given their natural and full meaning by the Tribunal in reaching its conclusion as to the application of the provisions. The Tribunal agrees with counsel for the applicants that provisions dealing with concessions and exemptions in taxation legislation “should not be construed narrowly”. The Tribunal has approached the interpretation of clause 6 in that manner. But it should be noted that care should be taken in construing such provisions to not give them any unintended application. In particular, in the case of an anti-avoidance provision like clause 12 dealing with restricting the exemption to one principal place of residence exemption for each family, it has to be applied correctly to situations, which it is intended to deal with.
68 In these circumstances, the applicants could not be taken under subclause 6(1), for the purpose of the principal place of residence exemption, to use and occupy the property as their principal place of residence on the relevant taxing date. And clause 12 would not have any application nor be available to the applicants to nominate the property as their preferred principal place of residence on the relevant taxing date. In any case, as indicated above, clause 12 has a special role to restrict the concession to one residence where members of a family have more than one principal place of residence and thus has no relevance to the current factual situation.
69 In summary, the applicants were thus not entitled to the concession pursuant to the application of subclause 6(7)(a) as they had another property, the Vaucluse residence, which was being used as their principal place of residence on the relevant taxing date. In addition, the concession was not available pursuant to subclause 6(7)(c) to them because the applicants had lawfully built two residential units on the property, one for their own use and the other as an investment property earning rental income. The applicants could not seek to nominate the property as their principal place of residence under provisions of clause 12, which did not apply to their factual situation as at the relevant taxing date.
Decision
Accordingly, the decision under review is affirmed
12
7
3