Ebrahimi v Chief Commissioner of State Revenue

[2022] NSWCATAD 303

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Ebrahimi v Chief Commissioner of State Revenue [2022] NSWCATAD 303
Hearing dates:	1 September 2022
Date of orders:	14 September 2022
Decision date:	14 September 2022
Jurisdiction:	Administrative and Equal Opportunity Division
Before:	S E Frost, Senior Member
Decision:	The land tax assessments for the 2018, 2019 and 2020 land tax years are confirmed.
Catchwords:	STATE TAXES – land tax – ‘principal place of residence’ exemption – applicant purchased a vacant block of land with the intention of building on it and using and occupying the building as his principal place of residence – land tax concession granted on the basis of that intention – preparatory work conducted on the land and services connected – construction did not commence before applicant disposed of the land by sale – concession revoked as actual use and occupation as the applicant’s principal place of residence did not eventuate
Legislation Cited:	Land Tax Management Act 1956 (NSW)
Cases Cited:	None cited
Texts Cited:	None cited
Category:	Principal judgment
Parties:	Abdul Matin Ebrahimi (Applicant) Chief Commissioner of State Revenue (Respondent)
Representation:	Applicant (self-represented) Crown Solicitor (Respondent)
File Number(s):	2022/00098558
Publication restriction:	Nil

REASONS FOR DECISION

1. The applicant in this matter, Abdul Matin Ebrahimi, purchased a block of land in East Ryde in April 2017. He intended to build a house on the land and then occupy the house, with his family, as his principal place of residence. Unfortunately, circumstances conspired against Mr Ebrahimi and he was unable to proceed with the planned construction. Eventually he sold the property in August 2020.

2. The respondent Chief Commissioner took the view that Mr Ebrahimi, in those circumstances, was not entitled to the land tax exemption that is available for a person's principal place of residence. Accordingly, the Chief Commissioner made an assessment of land tax for the land tax years 2018 to 2020 inclusive.

3. Mr Ebrahimi’s objection to the land tax assessments was unsuccessful, and he has now applied to the Tribunal for administrative review of those assessments.

4. I have concluded that the Chief Commissioner’s assessment is correct, and must be confirmed.

The relevant legislation

5. The relevant law is found in the Land Tax Management Act 1956 (NSW) (LTM Act). All legislative references that follow are to the LTM Act.

6. Land tax is payable on all land in NSW, unless the land is exempt: s 7. The person charged with the tax is the person who is the owner as at midnight on 31 December in each year: s 8.

7. A person’s principal place of residence is exempt from the tax: s 10(1)(r) and Schedule 1A. To attract this exemption the land must be ‘used and occupied by the owner as the principal place of residence of the owner of the land, and for no other purpose’: Schedule 1A, cl 2(1).

8. Schedule 1A contains a concession, in cl 6, by which a person who owns unoccupied land can claim it as their principal place of residence if they intend to use it as such. But this concession is only available for the 4 land tax years immediately following the year in which the person became the owner of the land: cl 6(3). If the owner doesn’t actually use and occupy the land as their principal place of residence within that period then the concession is revoked, and the exemption is taken not to have applied: cl 6(5) and (6). In practical terms, the owner has to build a house and then start living in it within the 4-year period, otherwise the exemption is not available.

Mr Ebrahimi’s ownership and use of the property

9. Mr Ebrahimi purchased the property as vacant land on 24 April 2017. He intended to build a residential dwelling on the property, and engaged an architect to design a house.

10. He lodged a development application with Ryde Council, which was approved in May 2018.

11. In June 2018 Mr Ebrahimi lodged with the Chief Commissioner’s office an Application for Exemption – Unoccupied Land Intended to be an Owner’s Principal Place of Residence. Mr Ebrahimi was notified in July 2018 that the clause 6 concession (see [8] above) had been applied in respect of the property, and the approval also contained the following information:

At the completion of the building works and/or prior to the expiry of the four year exemption period (or disposal of the property), you must commence to occupy the land as your principal place of residence and continue to do so for a period of at least six months. If you do not meet this residency requirement your exemption will be revoked and your liability to land tax will be assessed commencing from the time of your acquisition of the land.

12. Over a period of time Mr Ebrahimi spent a lot of money – he says it was almost $140,000 – on reports, excavation work, sewer and water, electricity and NBN connections.

13. He had some problems with builders, eventually finding one he could rely on. But the costs kept rising to such a level, that Mr Ebrahimi couldn’t get sufficient finance to cover them. Unable to afford the construction of the dwelling, Mr Ebrahimi sold the property in August 2020. No construction had commenced by that time.

Land tax liability?

14. It is clear that Mr Ebrahimi was the owner of the property on 31 December in each of 2017, 2018 and 2019. That means he will be liable to land tax for the 2018, 2019 and 2020 land tax years unless an exemption applied.

Mr Ebrahimi’s case

15. Mr Ebrahimi says it was always his intention to use the property as his principal place of residence. He undertook significant preparatory work, at considerable expense, to enable the construction of the residence his architect had designed. He was prevented from fulfilling his intention because of the impact of the COVID-19 pandemic (which, he says, cost him his job) and his inability to secure sufficient construction finance.

16. Mr Ebrahimi told me he has lived in Australia for 30 years, has always complied with the law, and has brought his children up to do the right thing. He claimed he was not informed about the 4-year limit on the clause 6 concession. He noted the leniency extended during the pandemic to those with mortgages, and those in rental accommodation, and hoped that he, too, would be treated fairly in this land tax matter. He asked that the land tax be waived.

The Chief Commissioner’s submissions

17. The Chief Commissioner submitted that the requirements of clause 6 had not been met, and the exemption must therefore be revoked.

18. It was submitted that there is no scope to take into account the reasons for a person’s failure to comply with the requirements of clause 6. Nor is there any discretion to waive the requirements, or to grant an exemption when the requirements have not been met.

Consideration

19. The Chief Commissioner’s submissions are correct and must be accepted.

20. The legislation is clear – when a person owns unoccupied land but intends to use and occupy it as their principal place of residence, they will get the benefit of the concession in clause 6. But the concession is really only provisional: the exemption will fall away if the owner fails to actually use and occupy the land for that purpose within the 4-year period set out in cl 6(3)(a).

21. In Mr Ebrahimi’s case, he did not actually use and occupy the property as his principal place of residence within the 4-year period. In fact, he sold the property before the expiry of the 4-year period. The effect of the law in those circumstances is that the exemption is revoked.

22. Neither the Chief Commissioner nor the Tribunal has the power to override the clear terms of the law. The land tax assessments are correct.

23. That may seem a harsh or unfair outcome for Mr Ebrahimi. I accept that he only ever intended to use the property as his principal place of residence but, as I have explained, that is not enough for the exemption to apply. There must also be actual use and occupation of the property as the owner’s principal place of residence, within the 4-year period specified. Failing that, the exemption must be revoked.

Conclusion

24. The land tax assessments for the 2018, 2019 and 2020 land tax years are confirmed.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 14 September 2022