GZP & GZQ v Chief Commissioner of State Revenue

[2025] NSWCATAD 135

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

GZP & GZQ v Chief Commissioner of State Revenue [2025] NSWCATAD 135

Hearing dates:

8 May 2025

Date of orders:

16 June 2025

Decision date:

16 June 2025

Jurisdiction:

Administrative and Equal Opportunity Division

Before:

J Smith, Senior Member

Decision:

The decision under review is affirmed.

Catchwords:

TAXES AND DUTIES – First Home Buyers Assistance Scheme – residence requirement –revocation of exemption of transfer duty – tax default – discretion to remit market and premium interest – exceptional circumstances – reasonable care

Legislation Cited:

Administrative Decisions Review Act 1997 (NSW)

Duties Act 1997 (NSW)

First Home Owner Grant and Shared Equity Act 2000 (NSW)

Property Tax (First Home Buyers Choice) Act 2022 (NSW)

Taxation Administration Act 1996 (NSW)

Cases Cited:

Adams Bidco Pty Ltd v Chief Commissioner of State Revenue [2019] NSWSC 702

Antegra Pty Ltd v Chief Commissioner of State Revenue [2021] NSWSC 107

Bayton Cleaning Company Pty Ltd v Chief Commissioner of State Revenue; International Hotel Services Pty Ltd v Same [2019] NSWSC 657

Chief Commissioner of State Revenue v Incise Technologies Pty Ltd [2004] NSWADTAP 19

Deverich v Chief Commissioner of State Revenue [2010] NSWADT 268

Downer EDI Engineering Pty Ltd v Chief Commissioner of State Revenue [2019] NSWSC 743

FCT v Traviati [2012] FCA 546

FVK v Chief Commissioner of State Revenue [2023] NSWCATAD 118

Golden Age and Hannas the Rocks Pty Ltd v Chief Commissioner of State Revenue [2024] NSWSC 249

Gunasti v Chief Commissioner of State Revenue [2012] NSWADT 218

Kirkovski v Chief Commissioner of State Revenue [2024] NSWCATAD 223

Simpson v Chief Commissioner of State Revenue [2009] NSWADT 55

Sobhani v Chief Commissioner of State Revenue [2009] NSWADT 198

Trust Co of Australia v Chief Commissioner of State Revenue [2002] NSWADT 21

Wan v Chief Commissioner of State Revenue [2025] NSWCATAP 54

Williamson v Chief Commissioner of State Revenue [2025] NSWCATAD 69

Winston-Smith v Chief Commissioner of State Revenue [2018] NSWSC 773

Texts Cited:

NCAT Practice Direction 7- Use of Generative Artificial Intelligence

Category:

Principal judgment

Parties:

GZP (First Applicant)
GZQ (Second Applicant)
Chief Commissioner of State Revenue (Respondent)

Representation:

First Applicant (self-represented)
Second Applicant (self-represented)

Counsel:
G Adams (Respondent)

Solicitors:
Crown Solicitor (Respondent)

File Number(s):

2024/00442667

Publication restriction:

The publication of the names of the Applicants is prohibited pursuant to s 64(1)(a) of the Civil and Administrative Tribunal Act 2013 (NSW).

REASONS fOR DECISION

Decision

1. The Applicants, GZP and GZQ, sought administrative review of the Respondent, the Chief Commissioner of State Revenue’s decision to revoke the Applicants’ exemption from transfer duty and impose interest on unpaid tax. This decision was made because the Applicants failed to occupy the subject residential property (“the property”), their first home purchase, as their principal place of residence for six continuous months within 12 months of purchase (“residence requirement”).

2. The Tribunal has found that there is not a good reason to reduce the period of, or exempt the Applicants from, the residence requirement. The Tribunal has found that there are no exceptional circumstances to warrant remitting the market rate component of interest, and no circumstances to warrant remitting the premium rate component of interest.

3. The Tribunal has therefore decided to affirm the decision of the Respondent, which means that the Applicants will have to pay the transfer duty on the property and the interest charged for the unpaid tax.

Overview

4. On 21 May 2023, the Applicants, a married couple, exchanged contracts for the purchase of the property for $850,000 and completed settlement on 3 July 2023. This was the first home they had each purchased.

5. The Respondent approved the Applicants’ application, under the First Home Buyers Assistance Scheme (the Scheme), to subject 100 per cent of the property to property tax, so that no transfer duty was charged on the contract.

6. On 3 November 2023, the Applicants sold the property for $950,000 to a third party and completed settlement on 30 November 2023, having lived in the property for 150 days.

7. On 17 March 2024, the Applicants purchased a second residential property for $1,020,000 and completed settlement on 18 April 2024. This is the home that the Applicants currently reside in.

8. On 4 July 2024, the Respondent issued a Duties of Notice Assessment to the Applicants, which indicated that the Applicants were required to pay $33,360 in transfer duty, as well $3,432.99 in interest (less an adjustment credit of $1,589.61 in respect of property tax already paid by the Applicants).

9. In relation to the amount of transfer duty, the Respondent determined that the approval for exemption from transfer duty was void, because the Applicants had not met the residence requirement.

10. In relation to the amount of interest, the Applicants did not pay the transfer duty, which was payable within three months after the date of the contract for the purchase of the property. This meant that a tax default occurred and the Applicants were liable for interest on the unpaid transfer duty at market and premium rate from the date of the tax default.

11. On 26 July 2024, the Applicants lodged an objection to the Duties Notice of Assessment. The Applicants stated that at no point of time during buying and selling the property, did any of the professionals, including two solicitors they had engaged, inform them that they had to live in the property for a minimum of six months before selling the property. The Applicants requested that the Respondent ‘approve a shorter period of occupation as a first home buyer’, and ‘hence waive the transfer tax’.

12. On 26 September 2024, the Respondent issued an Objection Determination, disallowing the Applicants’ objection. In relation to the transfer duty, the Respondent found that the discretion to alter the residence requirement is usually reserved for cases where there are significant unforeseen circumstances that prevent or delay the taxpayer from moving into the property, such as hospitalisation of the taxpayer, tending to sick relatives, unexpected interstate or overseas employment, or the home becoming uninhabitable. The Respondent was of the view that there was no justification for the exercise of the discretion. In relation to the interest, the Respondent found that the Applicants had not taken reasonable care to comply with the law and there were no grounds for remission of interest. The decision to revoke the exemption from transfer duty and impose interest was therefore affirmed.

13. The Respondent approved an interim instalment arrangement for the Applicants to pay $400 per month towards the transfer duty debt.

14. On 22 November 2024, the Applicants filed an application for administrative review with the Tribunal seeking a review of the Objection Determination. The Applicants requested in the application a ‘full or considerable waiver of the transfer tax or longer payment terms (7 years or more) without interest’.

15. On 8 May 2025, with the Tribunal satisfied it had jurisdiction in the matter, a hearing in person was held. During the hearing, both Applicants gave oral evidence. The Applicants and the Respondent made oral submissions.

16. At the hearing, in relation to the transfer duty, the Applicants stated that they seek that, once GZQ obtains employment (she was unemployed at the time of the hearing) the Applicants pay one third of the amount over the course of two years or a long-term interest free repayment plan over five to seven years, aligned with their actual financial capacity. This is because they believe that the two solicitors they had engaged in the purchase and subsequent sale of the property should each bear one third of the responsibility, leaving the Applicants responsible for one third of the amount of transfer duty. In relation to the interest, the Applicants seek that the total amount of interest, both the market rate component and the premium rate component, be remitted.

17. The Respondent seeks that the Tribunal affirm the Respondent’s decision to revoke the Applicants’ exemption from transfer duty and to charge interest on the unpaid tax.

Issues

18. The task of the Tribunal is to decide what the correct and preferable decision is, having regard to any relevant factual material and any applicable law (pursuant to s 63 of the Administrative Decisions Review Act 1997 (NSW) (ADR Act)). In undertaking this task, the following issues require determination:

• Issue 1: Is there a good reason to reduce the period of, or exempt the Applicants from, the residence requirement?

• Issue 2: Are there exceptional circumstances, including factors beyond the control of the Applicants and/or Respondent, to warrant remitting the market rate component of interest?

• Issue 3: Is there a basis for the remission of the premium component of interest on the Applicants’ circumstances?

Relevant taxation law

First home buyer/owner

19. Section 5(1) of the Property Tax (First Home Buyers Choice) Act 2022 (NSW) (PT Act) defines a ‘first home buyer’ as a person:

1. who is an individual, and

2. who is 18 years of age or older, and

3. who has not at any time owned residential land in Australia, either solely or with another person, and

4. who has not previously been a party to a relevant application approved by the Chief Commissioner, and

5. if the individual has a spouse - whose spouse:

1. has not at any time owned residential land in Australia, either solely or with another person, and

2. has not previously been a party to a relevant application approved by the Chief Commissioner.

20. At the time that the Applicants purchased the property, s 71(2) of the Duties Act 1997 (NSW) (Duties Act) defined a ‘first home owner’ as an individual:

1. Who has not at any time owned residential property in Australia (either solely or with someone else) and has not previously been a party to an application under the scheme that was approved by the Chief Commissioner, and

2. whose spouse (if any) has not at any time owned residential property in Australia (either solely or with someone else) and has not previously been a party to an application under the scheme that was approved by the Chief Commissioner.

21. In this matter, there is no dispute that the Applicants were first home buyers within the meaning of the PT Act, and first home owners within the meaning of the Duties Act, in relation to the property.

First home buyer/owner - residence requirement

22. Section 15(1) of the PT Act provides that if an application to subject transferred land to property tax is approved by the Chief Commissioner, at least one first home buyer who is a transferee must occupy the transferred land as a principal place of residence for a continuous period of at least six months.

23. This occupation must start within 12 months after the land is transferred (PT Act, s 15(2)).

24. In accordance with s 15(3) of the PT Act, the Chief Commissioner may, if satisfied that there are good reasons to do so:

1. approve a shorter period of occupation by a first home buyer, or

2. approve a later day on which occupation by a first home buyer must start, or

3. exempt a first home buyer from the occupation requirement.

25. The Chief Commissioner may give approval or exemption under s 15(3) of the PT Act even if it is more than 12 months after the land is transferred, or the first home buyer no longer occupies the land as a principal place of residence (PT Act, s 15(4)).

26. There are similar residence requirements in the First Home Owner Grant and Shared Equity Act 2000 (NSW) (FHOG Act) and the Duties Act.

27. At the time that the Applicants purchased the property, s 12(1) of the FHOG Act required that an application for a first home owner grant must commence occupation of the home to which the application relates as the applicant’s principal place of residence within 12 months after completion of the eligible transaction or the period approved by the Chief Commissioner under this section, and occupy the home as a principal place of residence for a continuous period of at least six months or the period approved by the Chief Commissioner under this section. This requirement is referred to in the FHOG Act as the residence requirement (FHOG Act, s 12(3)).

28. At the time that the Applicants purchased the property, under s 12(3) of the FHOG Act, the Chief Commissioner, if satisfied that there are good reasons to do so, had the discretion to do either or both of the following:

1. approve the commencement of occupation by the applicant of the home to which the application relates as a principal place of residence more than 12 months after completion of the eligible transaction,

2. approve the occupation of the home as a principal place of residence for a period of less than six months.

29. Division 1 (First Home Buyers Assistance Scheme) of Part 8 of the Duties Act, also has a residence requirement. At the time that the Applicants purchased the property, s 76(1) of the Duties Act required that the home must be occupied by the first home owner or one of the first home owners who is acquiring it as a principal place of residence for a continuous period of at least six months, with that occupation starting within 12 months (or such longer period as the Chief Commissioner may approve) after completion of the agreement or transfer.

30. At the time that the Applicants purchased the property, s 76(2) of the Duties Act allowed the Chief Commissioner the discretion, if satisfied there were good reasons to do so in a particular case, to:

1. modify the residence requirement by approving a shorter period of occupation by a first home owner, or

2. exempt a first home owner from the requirement to comply with the residence requirement.

31. In summary, the Respondent, and the Tribunal in review, can approve a shorter period for the residence requirement or exempt a first home buyer from the residence requirement, if satisfied that there is good reason to do so. This may be done after the first home buyer is no longer residing in the property.

First home buyer - approval and revocation of approval for exemption from paying transfer duty

32. Section 18(1)(c) of the PT Act provides that if an application to subject transferred land to property tax is approved by the Chief Commissioner, on the giving of the approval, the duty chargeable on the transfer is reduced by the proportion that becomes subject to property tax. The note to this section states that if the proportion of the transferred land is 100 per cent, the transfer is exempt from duty under Chapter 2 of the Duties Act.

33. Section 19(1) of the PT Act provides that an approval of the Chief Commissioner is void and is taken never to have been given for the purposes of the PT Act if the Chief Commissioner if satisfied, amongst other matters that:

1. the transfer to which the approval relates is not in conformity or substantial conformity with the agreement for sale or transfer as required by s 17, or

2. the residence requirement in s 15 has not been satisfied, or

3. the approval would not have been given had the Chief Commissioner been aware of all relevant information.

34. If the approval is void, duty is chargeable as if the application had never been made (PT Act, s 19(2)), and duty chargeable is a charge on the land transferred until the duty is paid (PT Act, s 19(3)).

Tax default and interest payment

35. Section 3(1) of the Taxation Administration Act 1996 (NSW) (TA Act) defines a ‘tax default’ as a failure by a taxpayer to pay, in accordance with a taxation law, the whole or part of tax that the taxpayer is liable to pay.

36. If a tax default occurs, the taxpayer is liable to pay interest on the amount of tax unpaid calculated on a daily basis from the end of the last day for payment until the day it is paid at the interest rate from time to time applying under Division 1 of Part 5 (Interest and penalty tax) of the TA Act (TA Act, s 21).

37. Section 22 of the TA Act provides that the interest rate is the sum of the market rate component and the premium rate component. The way that these rates are calculated are set out in s 22 of the TA Act.

Remission of interest

38. Section 25 of the TA Act provides for the remission of interest by the Chief Commissioner as follows:

1. The Chief Commissioner may remit interest.

2. The Chief Commissioner may issue guidelines setting out how interest must be remitted under this division.

3. If guidelines are issued, interest must be remitted only in accordance with the guidelines.

4. The imposition or remission of penalty tax is not relevant to the imposition or remission of interest.

39. Section 25 of the TA Act was amended on 1 February 2024. There are currently no guidelines issued by the Respondent for the current form of s 25 of the TA Act.

Review by the Tribunal

40. Section 96(1) of the TA Act provides that a taxpayer may apply to the Tribunal for an administrative review under the ADR Act of a decision of the Chief Commissioner that has been the subject of an objection under Division 1 of the TA Act (Objections and reviews) if the taxpayer is dissatisfied with the Chief Commissioner’s determination of the taxpayer’s objection.

Powers of the Tribunal on review

41. Section 101(1) of the TA Act provides that the Tribunal dealing with the application for review may do any one of the following:

1. confirm or revoke the assessment or other decision to which the application relates,

2. make an assessment or other decision in place of the assessment or other decision to which the application relates,

3. make an order for payment to the Chief Commissioner of any amount of tax that is assessed as being payable but has not been paid,

4. remit the matter to the Chief Commissioner for determination in accordance with its finding or decision,

5. make any further order as to costs or otherwise as it thinks fit.

Onus of proof

42. In an application for administrative review to the Tribunal, the applicant has the onus of proof of proving the applicant’s case (TA Act, s 100(3)).

Material before the Tribunal

Applicants

43. The Applicants relied on:

1. Administrative review application filed on 22 November 2024 (Exhibit A1).

2. ‘Statutory Declaration’ signed jointly by the Applicants on 20 February 2025. This document was not witnessed (Exhibit A2).

3. ‘Statutory Declaration’ signed jointed by the Applicants on 7 May 2025. This document was not witnessed (Exhibit A3).

44. During cross-examination, GZP stated that he had drafted the content of the Statutory Declarations himself and then uploaded the content into ChatGPT to make the content sound better. GZP then collated the paragraphs refined by ChatGPT into one document. GZP confirmed that the Statutory Declarations were true and correct to the best of his knowledge.

45. During cross-examination, GZQ stated that she had not drafted the content, but had read the document after GZP had collated it. GZQ confirmed that she agreed with the contents of the Statutory Declarations.

46. Clause 14 of NCAT Practice Direction 7- Use of Generative Artificial Intelligence states that Generative Artificial Intelligence must not be used for the purpose of altering, embellishing, strengthening or diluting or otherwise rephrasing a witness’s evidence when expressed in written form. The Applicants were clearly not aware of this prohibition and were self-represented. The Tribunal accepted, without any objections made by the Respondent, the tender of the two Statutory Declarations signed by the Applicants as each Applicant stated under oath that the contents were true and correct to the best of their knowledge. The Applicants were cross-examined during the hearing so that the content of their Statutory Declarations could be tested. The Applicant’s Statutory Declarations also contained a significant amount of submissions rather than evidence.

Respondent

47. The Respondent relied on:

1. The bundle of documents filed pursuant to s 58 of the ADR Act on 20 December 2024 (Exhibit R1).

2. Additional bundle of documents filed on 20 March 2025 (Exhibit R2).

3. Respondent’s outcome of submissions (Exhibit R3).

4. First Home Buyers Choice Property Tax Application Form and Lodgement Guide, July 2023 (Exhibit R4).

5. Respondent’s bundle of authorities and legislation (Exhibit R5).

6. First Home Buyers Choice Property Tax Application Form and Lodgement Guide, January 2023 (Exhibit R6).

7. MARS Document view print out for the property (Exhibit R7)

48. The Respondent confirmed that it had not used Generative Artificial Intelligence in the preparation of any of the Respondent’s evidence or submissions.

Consideration

Issue 1: Is there a good reason to reduce the period of, or exempt the Applicants from, the residence requirement?

Applicable case law

49. There are currently no reported decisions involving the exercise of the discretion in s 15(3) of the PT Act to approve a shorter period for the residence requirement. The Tribunal is therefore guided by the Tribunal’s decisions in the exercise of a similar discretion in the Duties Act and the FHOG Act, which requires there to be a ‘good reason’ for the discretion to be exercised.

50. In Sobhani v Chief Commissioner of State Revenue [2009] NSWADT 198, Judicial Member Verick stated the following at [53] and [56], in relation to the exercise of the discretion in the Duties Act and the FHOG Act:

The discretion is intended to allow the grant to be retained under the FHOG Act and the FHP Concession to apply under the Duties Act in circumstances where the applicant had a real bona fide intention to occupy and use the home as his or her principal place of residence, but failed to do so due to a change in circumstances after the purchase of the home. Generally speaking, an acceptable circumstance would be one outside the control of the applicant. Without placing any limitation, the circumstances would include the need for an applicant to move interstate or overseas to carry out work duties, the serious illness of an applicant after exchange of contracts preventing occupation and use of the property, or a financial difficulty, for example loss of the income-earning job, after purchase of the property.

If, on the other hand, the discretionary relief had been given, the respondent would have clearly “transgressed” the threshold fixed to achieve the primary objective of the relevant legislation. The primary objective of the relevant provisions is to assist people resident in New South Wales to acquire their first home and not to purchase their first investment property. The “residence requirement” ensures that the property is used and occupied as the principal place of residence by an applicant getting a grant and the First Home Plus scheme duty concession.

51. According to the reasoning in Sobhani, for the discretion to be exercised to allow a person who had not met the residence requirement to retain the first home owners grant under the Duties Act and the FHOG Act, there needs to be a change in circumstance after the purchase of the property which was outside the control of the applicant.

52. The decision in Sobhani has been met with approval in subsequent cases:

1. In Deverich v Chief Commissioner of State Revenue [2010] NSWADT 268 at [48], the Tribunal stated that the discretion should be considered in cases where there is a bona fide attempt by the applicant to establish his or her first home and some impediment beyond the control of the applicant prevents the occupation of the property for a continuous period of six months. In this case, the applicant was aware at the time he made the application for the grant that he would not satisfy the residence requirement because of the nature of his employment. The Tribunal also noted that the primary objective of the relevant provisions is to assist applicants resident in NSW to acquire their first home and not to purchase their first investment property. The residence requirement ensures that the property is used and occupied as the principal place of residence by an applicant getting a grant and the First Home Plus duty concession scheme. In this matter, when the grant was sought it was not for a first home but an investment property. The Tribunal found that the applicant failed to establish any ‘good reasons’ for the discretion to be exercised.

2. In Kirkovski v Chief Commissioner of State Revenue [2024] NSWCATAD 223, the applicants sought that their occupation of the property before the completion of the contract be counted or credited towards the continuous period of six months. The Tribunal stated that something more than the simple fact that the property was occupied before the completion of the contract was necessary to provide the ‘good reason’ that enlivened the discretion in s 76(2) of the Duties Act and s 12(3)(b) of the FHOG Act. The Tribunal found that the applicants’ occupation of the property before the completion of the contract cannot of itself be either a change in circumstances after the purchase of the home or an impediment beyond the control of the application that prevents occupation of the property for a continuous period of six months.

3. In Williamson v Chief Commissioner of State Revenue [2025] NSWCATAD 69, the applicant sought that the Tribunal exercise the discretion to shorten (or waive) the six-month residence requirement under the FHOG Act because of the applicant’s decision to move out of the property and/or live, instead, with her parents due to the combination of required remote work arrangements and COVID-19 lockdowns. The Tribunal referred to Simpson v Chief Commissioner of State Revenue [2009] NSWADT 55 at [70] in which it was found that the positive exercise of a discretion in such a case (where there is nothing more than a decision/choice made by an applicant) would defeat the object of the legislature in having a residence requirement (to be met within a certain timeframe) in the first place. In Williamson, the Tribunal was not satisfied that the applicant was compelled to move out of the property, or that she was unable to comply with the six-month residence requirement arising by a circumstance that was unforeseen at the time of the purchase of the property, or that she moved back in as soon as the circumstances enabled reoccupation to commence.

Relevant evidence and the Tribunal’s findings

Applicant’s awareness of the residence requirement

53. The Applicants submitted that they were genuinely unaware of the residence requirement.

54. During cross-examination, the Applicants confirmed that at the time they made their application under the Scheme, they were aware that they had to start living in the property in the first 12 months after purchase. The Applicants were also aware of the threshold of the property price to be eligible under the Scheme.

55. The Applicants stated they had engaged two solicitors, one for the purchase of the property and one for the sale of the property and neither solicitor had advised the Applicants of the residence requirement. The Applicants stated that their mortgage broker and no other professional had advised them of the residence requirement.

56. The Applicants did not provide any evidence of communications with either solicitor they retained or their mortgage broker to support their claim that they were not advised of the residence requirement by these persons.

57. The Applicants confirmed that they did not ask either solicitor they retained and they did not ask the Respondent at any point about how long they had to live in the property to be eligible under the Scheme.

58. The Applicants both completed and signed a First Home Buyer Choice Property Tax Application Form and Lodgement Guide in making their application under the Scheme. At multiple parts of this form are references to the residence requirement including:

1. Page 1 – “Applicants found to be ineligible, or who do not meet the residence requirement, must pay the transfer duty and any interest or penalty applicable from the date of the transaction.”

2. Page 3, under the heading in large bold font “Residence requirement” - “The home must be occupied by at least one of the eligible purchasers as their principal place of residence for a continuous period of at least 6 months, with that occupation starting within 12 months after completion of the transaction” and “If circumstances change and you are unable to meet the residence requirements, you must contact Revenue NSW.”

3. Page 6 – in the “Eligibility checklist” where “yes” or “no” must be ticked by the applicant to the following question – “Will the property be occupied by at least one of the eligible purchasers as their principal place of residence for a continuous period of 6 months commencing within 12 months from the date of completion of the transaction.”

4. Page 12 – under “Declaration by eligible purchaser(s)” where each applicant solemnly and sincerely declares that (amongst other matters) – “At least one eligible purchaser will occupy the home that is the subject of this application as their principal place of residence for a continuous period of six months commencing within 12 months from the date of completion of the transaction” and “I undertake to notify the Chief Commissioner if I fail to meet the residence requirement” and “I have read and understood the information prepared by Revenue NSW relating to the conditions of eligibility. I accept that if the conditions are not met, the approval to opt into property tax may be voided and taken to have never been given. If the approval is void, I understand transfer duty and any interest or penalty is applicable from the date of the transaction”. In the signing the Declaration, the following must be ticked and is in bold – “Under the Tax Administration Act 1996, it is an offence to give false or misleading information. I declare that all information provided is true and correct in every particular.”

5. Page 15 – under “Penalties” – “Applicants that have opted into Property Tax that are found ineligible, or who do not meet the residence requirement, must pay the transfer duty and any interest or penalty applicable from the date of the transaction”.

59. During cross-examination, both Applicants were taken through these parts of the form that referred to the residence requirement. GZP stated that that they signed off on any document from the bank and mortgage broker and solicitor but they did not read it. GZQ stated that she may have glanced at the document and not read it line by line. GZP stated that there is no mention in the form of selling the property but conceded that they should have contacted the Respondent if their circumstances changed or they were not sure about the situation prior to selling the property. GZQ stated that they were happy to take the responsibility for one third of the amount of transfer duty, as the other two solicitors should also be responsible.

60. On the first page of the First Home Buyer Choice Property Tax Application Form, it states “Before completing the application, each person should read the information contained within the form and on the First Home Buyer Choice web page.” On the home page of the First Home Buyer Choice web page, there is a link to “residence requirements”. The first sentence that appears when this link is opened, states: “The home must still be occupied by at least one of the eligible purchasers as their principal place of residence for a continuous period of at least 6 months, with that occupation starting within 12 months after settlement.” This is content that was applicable to applications prior to 1 July 2023, when First Home Buyer Choice closed to new applications.

61. This information on the First Home Buyer Choice web page is accessible to the public and not difficult to locate. GZQ stated that her usual occupation is a program coordinator for a government funded agency. GZQ stated that GZP was an IT officer for a travel insurance company and that it is GZP that manages their paperwork and finances. There was no evidence before the Tribunal that either Applicant had any limitations or difficulties in being able to access this information.

62. During the hearing, the Respondent produced a MARS Document view print out for record of the property, which confirmed that the Respondent approved the Applicants’ application, under the Scheme, to subject 100 per cent of the property to property tax. The Respondent submitted that, while they could not produce a signed copy of the First Home Buyer Choice Property Tax Application Form and Lodgement Guide, the MARS record confirmed that this form would have been submitted and processed.

63. On 12 July 2023, ten days after they had completed settlement on the property, an email was sent to GZP’s current email address, addressed to both Respondents, which stated the following:

What do you need to do?

At least one of the included owners must occupy the home (as a principal place of residence) for a continuous period of at least 6 months. This must begin within 12 months of the settlement date if you have purchased an existing home.

64. The Applicants stated that they did not receive this email and suggested that this email may have been received as spam and then deleted automatically before they read it. The Applicants submitted that the Respondent had not filed any evidence that this email had been received by the Applicants.

65. The Applicants, however, have received other emails from the Respondent using the same email address, including notices of assessment.

66. The Applicants, in their grounds for the application, stated that the information about the residence requirement is “unclear to understand by a member of the public, especially those who are first home buyers, unless a professional explains the residence requirement”. They stated that it was not clear that first home buyers have to live in the property for a minimum of six months before selling (the Applicants’ emphasis). Given that the Applicants maintain that they were not aware of the residence requirement at all, the Tribunal does not accept this submission that it was not clear to the Applicants that they had to live in the property for six months before selling the property.

67. In FVK v Chief Commissioner of State Revenue [2023] NSWCATAD 118 at [39], the Tribunal stated that there is nothing at law which imposes upon the Chief Commissioner a legal obligation of any sort to keep citizens, either collectively or individually, advised or warned about their potential liability for any form of taxation or duty, or to issue notice of any such liability promptly.

68. The Applicants also submitted that had they been informed of the residence requirement, they would not have transferred the property just 33 days before fulfilling the residence requirement. The Applicants submitted that it is ‘very obvious and logical’ that they would have lived in the property for another two months if they had known about the residence requirement.

69. The Tribunal finds that the Applicants were aware of the residence requirement at least by the time that they each completed and signed the First Home Buyer Choice Property Tax Application Form and Lodgement Guide. This form is clear and repetitive in the message that the home must be occupied by at least one of the eligible purchasers as their principal place of residence for a continuous period of at least six months, with that occupation starting within 12 months after completion of the transaction. The form is clear that if circumstances changed that the first home buyer is to contact Revenue NSW. The form is also clear about the consequences for not meeting the residence requirements.

70. The Respondent’s messaging in the First Home Buyer Choice Property Tax Application Form and Lodgement Guide, the Respondent’s website and the email sent to the Applicants on 12 July 2023 about the residence requirement includes reference to both the length of the time that the first home buyer has to live in the home (six months) as well as when this occupation has to commence (within 12 months after completion of the transaction). The legislative provisions also have these two components of the residence requirement in the same section throughout the three separate Acts (PT Act, s 15; FHOG Act, s 12; Duties Act, s 76). The Tribunal finds it highly unlikely that the Applicants would only be aware that they had to reside in the property within 12 months after completion of the transaction, but not know how long they had to reside in the property.

Changes in circumstances

71. The Applicants stated that there were a number of changes in their circumstances which caused them to sell the property, including:

1. GZQ has asthma and the condition of the property was causing GZQ to have asthma attacks and was adversely affecting her health. The bathroom was mouldy, and the carpets were old and they could not afford renovations.

2. GZQ’s parents, who live overseas, were going to come and live with them and assist with the mortgage and help with the cost of renovations. GZQ’s parent subsequently had a heart attack and this plan did not proceed.

3. GZP was made redundant in March 2024.

72. The Applicants did not produce any evidence in relation to the state of the property and the effect this on GZQ’s health. The Applicants did not produce any evidence that the property was uninhabitable.

73. During cross-examination, GZQ was asked about the inspection they undertook of the property prior to purchase. GZQ stated that they inspected the property once, she did not recall seeing black (mould) marks, there were 20 other people inspecting the property at the time of the inspection, they could not look at the property thoroughly, and she could not recall whether they obtained a building inspection report prior to purchase. GZQ also stated that they did not know at the time of the purchase how costly it would be to renovate the property.

74. GZP’s redundancy in March 2024 falls outside of the period of time in which the Applicants were residing in the property. The redundancy clearly did not cause the Applicants’ failure to comply with the residence requirement or compel the Applicants to sell the property in November 2023.

75. However, one month after GZP’s redundancy in March 2024, the Applicants sold the property for $950,000 and purchased a second property for $1,020,000.

76. When asked about the purchase of the second property, GZQ stated that they had not initially intended to sell the property or buy a new property, however an agent knocked on their door one day and told them that the property could be sold for a better price. GZQ conceded that there was financial gain for them in terms of being able to pay off some personal loans and have a “little bit of surplus”.

77. The Applicants did not provide any reliable or corroborative evidence in relation to their financial situation. The Applicants did not provide any evidence of quotes they had obtained to renovate or rectify any issues in the house.

78. During cross-examination, GZQ stated that her parents did not have a visa, and had not applied yet for a visa, at the time that they purchased the property. There was no reliable or corroborative evidence provided by the Applicants of any of the plans that they had made for GZQ’s parents to be involved in the purchase of the property or to assist them financially after the purchase of the property.

79. The Tribunal is not satisfied that there were circumstances outside of the Applicants’ control that meant they could not fulfil the residence requirement. The Tribunal finds that it was the Applicants’ choice to sell the property and purchase a new property, and the issues that they had with the state of the property were foreseeable or could have been ascertained with due diligence at the time that they purchased the property. The Tribunal is also not persuaded that the Applicant’s financial situation compelled them to sell the property.

Bona fide intention

80. The Applicants submitted that it had always been their intention to comply with all eligibility criteria. They submitted that ‘despite being entirely unaware of the specific detail or implications’ of the residence requirement, they did not lease out the property (after purchase and before they sold it). The Applicants submitted that they believe that this demonstrates their good faith intention to occupy the property and adhere to the requirements, ‘even in the absence of explicit knowledge of those obligations’.

81. The Tribunal finds this submission nonsensical as the Applicant are stating that they had a genuine intention to comply with a requirement that they did not know about.

82. The Tribunal does not accept that not leasing the property or otherwise refraining from doing something in contravention of the residence requirement, means that the Applicants had a bona fide intention to meet the residence requirement. Selling the property for financial gain before fulfilling the residence requirement which they declared they were aware of and would fulfil, and then not notifying the Respondent of the change in circumstances (selling and moving out of the property before the period of six continuous months had been met), infers, rather, that the Applicants did not have a bona fide intention to meet the residence requirement.

83. The Tribunal is not satisfied that the Applicants have demonstrated that they had a bona fide intention to comply with the residence requirement, in circumstances where they claim that they did not know about the requirement and where it can be inferred by their conduct that they did not actually have a bona fide intention to comply with the requirement.

Conclusion to Issue 1

84. The Tribunal has found that:

1. The Applicants were aware of and had declared to the Respondent that they would fulfil the residence requirement,

2. The Applicants have not demonstrated a bona fide intention to fulfil the residence requirement, and

3. There were no circumstances outside of their control which meant they could not fulfil the residence requirement.

85. The Tribunal is therefore not satisfied that there is a good reason to reduce the period of, or exempt the Applicants from, the residence requirement.

86. The Tribunal does not accept the Applicants’ proposal that they only be held responsible for paying one-third of the transfer duty, due to the failure of the two solicitors they engaged to advise them about the residence requirement. Apart from there being no evidence to support this contention, the Tribunal has found that the Applicants were aware of the residence requirement at the time that they completed and signed the First Home Buyer Choice Property Tax Application Form and Lodgement Guide.

87. During the hearing, the Tribunal stated that if the Tribunal was to affirm the Respondent’s decision, and the Applicants were seeking to pay the amount in instalments over a period of time, this would be a matter for the parties to negotiate.

Issue 2: Are there exceptional circumstances, including factors beyond the control of the Applicants and/or Respondent, to warrant remitting the market rate component of interest?

Applicable case law

88. To determine whether there is a basis to exercise the discretion to remit the market rate component of interest it is necessary to understand the subject matter, scope and purpose of the provision: Wan v Chief Commissioner of State Revenue [2025] NSWCATAP 54 at [67].

89. In Chief Commissioner of State Revenue v Incise Technologies Pty Ltd [2004] NSWADTAP 19 at [60], the Appeal Panel considered the purpose of the market rate component of interest and stated that:

1. It is intended to compensate the Commissioner for not having the benefit of the tax payment from the time it was due.

2. It is a rate that fluctuates, and is connected to an external rate, the Reserve Bank’s Accepted Bill rate.

3. It is a component that could rarely, if ever, be waived as otherwise tax would be paid at a devalued amount thereby discriminating against taxpayers who meet their obligations on time.

4. To justify any remission of the market rate component of interest, it would be necessary to show that in some way the Commissioner contributed to the default.

90. In Trust Co of Australia v Chief Commissioner of State Revenue [2002] NSWADT 21 at [27], the Tribunal stated that only exceptional circumstances would justify any remission of the market rate component of interest. The narrow category of circumstances would include cases where the tax default is entirely the fault of the Chief Commissioner or situations completely out of the control of the taxpayer.

91. In Wan at [72], the Appeal Panel stated that the market rate interest arises to compensate the Commissioner from being out of pocket and accordingly, the purpose of the market rate provision is to limit the types of factors that might warrant a remission of market interest. Given the purpose of market rate interest, it is apt to look for ‘exceptional circumstances’ to warrant remission.

Relevant evidence and the Tribunal’s findings

92. In relation to the interest, the Applicants seek that the total amount of interest, both the market rate component and the premium component.

93. The Applicants did not make any submissions or produce any evidence in relation to whether the Tribunal should remit the market rate component of interest. The Applicants submissions focused on how they took reasonable care and their financial situation which are not relevant to the Tribunal’s consideration of whether the market rate component of interest should be remitted.

94. In relation to the determination of Issue 1, the Tribunal made a finding that there were no circumstances outside of the Applicants’ control that meant they could not fulfil the residence requirement.

95. There is no evidence before the Tribunal that there was any fault of the Respondent or any other situation completely out of the control of the Applicants that prevented them from paying the transfer duty on time. The Tribunal is not satisfied that the Applicants have demonstrated any exceptional circumstances to warrant the remission of the market rate component of interest.

Conclusion to Issue 2

96. Given the lack of evidence of any situation outside of the control of the Applicants or any exceptional circumstances, the Tribunal is of the view that the discretion to remit the market rate component of interest should not be exercised.

Issue 3: Is there a basis for the remission of the premium component of interest on the Applicants’ circumstances?

Applicable case law

97. Similar to the market rate component of interest, to determine whether there is a basis to exercise the discretion to remit the premium component of interest it is necessary to understand the subject matter, scope and purpose of the provision: Wan at [67].

98. In Incise Technologies at [61], the Appeal Panel stated that the premium component of interest is a form of penalty. Its purpose is to provide an additional economic deterrent against taxpayers failing to meet their obligations on time and is intended to operate as the key disincentive to delaying tax payments.

99. In Adams Bidco Pty Ltd v Chief Commissioner of State Revenue [2019] NSWSC 702 at [157]-[158], the Supreme Court stated that the premium component of interest is a form of penalty that is imposed in order to deter conscious and willing tax defaults, in order to dissuade taxpayers who may otherwise defer payment of taxation in order to invest the money elsewhere to earn a return above the market interest component.

100. The Supreme Court in Golden Age and Hannas the Rocks Pty Ltd v Chief Commissioner of State Revenue [2024] NSWSC 249 at [102], held the view that it is necessary to approach the remission question by recognising that the premium component is penal in nature and serves the purpose of both imposing a penalty and deterring taxpayers from delaying payment of duty in what is essentially a self-assessment regime. Consequently, the culpability of the taxpayer in failing to pay the duty liability by the due date is an important matter in the exercise of the discretion.

101. The Appeal Panel in Incise Technologies at [62]-[63], stated that the following four cumulative criteria are relevant and appropriate to the question of the circumstances in which the premium component of interest should be remitted:

1. All principal tax that is owing and not in dispute has been fully paid.

2. There has been co-operation by the taxpayer in providing relevant information to the Commissioner so as to enable the Commissioner to issue assessments.

3. Such co-operation by the taxpayer has occurred prior to any investigation being commenced by the Commissioner (voluntary disclosure) or, at the very least, within reasonable time after requests for information have been made by the Commissioner – i.e. the taxpayer has taken reasonable care.

4. There has been no wilful default by the taxpayer in not paying tax on time.

102. In relation to the fourth criterion identified by the Appeal Panel in Incise Technologies of ‘wilful default’, where the taxpayer has received advice that it has good prospects of challenging the assessment, there may not be a wilful default: Winston-Smith v Chief Commissioner of State Revenue [2018] NSWSC 773 at [86].

103. These four criteria are not exhaustive and other relevant matters may be taken into account: Antegra Pty Ltd v Chief Commissioner of State Revenue [2021] NSWSC 107 at [178].

104. The discretion conferred by s 25 of the TA Act is broad and must be exercised in accordance with the circumstances of the case: Downer EDI Engineering Pty Ltd v Chief Commissioner of State Revenue [2019] NSWSC 743 at [185]–[186].

105. Whether a taxpayer has taken reasonable care is material to the question of remission: Golden Age at [106].

106. Whether the taxpayer has taken reasonable care to comply with the taxation law turns on whether the taxpayer has exercised the care that a reasonable person would be likely to have exercised in the circumstances of the taxpayer, and while this involves an objective standard, it also considers the subjective circumstances of the taxpayer: FCT v Traviati [2012] FCA 546 at [36] and [70].

107. An assessment of the degree of the taxpayer’s culpability is material and not limited to whether the taxpayer took reasonable care or whether there were exceptional circumstances (although these factors are not irrelevant and the Tribunal can place great weight on them) but can extend to considering the personal circumstances of the taxpayer: Wan at [81]-[82].

108. In Bayton Cleaning Company Pty Ltd v Chief Commissioner of State Revenue; International Hotel Services Pty Ltd v Same [2019] NSWSC 657, at [114] and [297], the Supreme Court accepted the following statement in Qualdweld Australia Pty Ltd v Chief Commissioner of State Revenue [2014] NSWCATAD 227 at [95] about the concept of reasonable care:

In each case, it is essentially a question of fact whether the taxpayer has taken reasonable care in attending to its tax obligations. Factors that would indicate that a taxpayer took reasonable care include reasonable attempts to comply with the tax law, reasonable professional and other inquiries to ensure compliance, reliance on professional advice or on official published views of the tax law. Factors which indicate that a taxpayer failed to take reasonable care include oversight or forgetfulness to meet with obligations, failure to maintain adequate records and procedures to prevent errors from occurring, not seeking professional advice and errors in complying with the law.

109. There is no general discretion available to the Respondent or to the Tribunal based on “fairness” and even if an assessment was unfair or unjust, this does not affect the validity of the assessment: Gunasti v Chief Commissioner of State Revenue [2012] NSWADT 218 at [43] and [48].

Relevant evidence and the Tribunal’s findings

110. The Tribunal has found that the Applicants were aware of the residence requirement at least by the time that they each completed and signed the First Home Buyer Choice Property Tax Application Form and Lodgement Guide. On page 15 of this form which both Applicants signed, it was clear what penalties could result if the Applicants, who had opted into property tax, were found ineligible or did not meet the residence requirement. These penalties were that they “must pay the transfer duty and any interest or penalty applicable from the date of the transaction”.

111. The Applicants have not paid the full amount of the transfer duty as assessed by the Respondent. The Respondent has approved an interim instalment arrangement for the Applicants to pay $400 per month towards the transfer duty debt. The first criterion in Incise Technologies, that all principal tax that is owing and not in dispute is fully paid, has not been met by the Applicants.

112. The Applicants submitted that they had exercised reasonable care by relying on professional legal representation. This submission, however, was about the Applicants’ contention that neither of the two solicitors they had retained specifically for the sale and purchase of the property had advised them of the residence requirement.

113. The Applicants submitted that if someone does not know what care to take, how can they know what is reasonable. The Applicants submitted that they did not know what to do, so they did not call the Respondent and they expected their solicitors to give them legal advice. The Applicants submitted that they paid for legal advice that they did not get.

114. During cross-examination, the Applicants conceded that they had not asked their solicitors or the mortgage broker about the residence requirement. GZQ acknowledged, under cross-examination, that a lawyer-client relationship can involve the client asking questions that the lawyer gives advice on. The Applicants conceded that they did not ask their solicitors about how long they needed to reside in the property. The Applicants did not provide any evidence or otherwise submit that they had actively sought professional advice to ensure that they were compliant with their tax obligations. The Applicants conceded that they had not contacted the Respondent or accessed any of the information to the public on the Respondent’s website about their tax obligations prior to the tax default.

115. The Tribunal is not satisfied that the Applicants took reasonable care because they did not specifically seek advice about their tax obligations from the Respondent or the two solicitors they engaged for the sale and purchase of the property.

116. The Applicants submitted that they have suffered financial hardship ‘following the unexpected imposition of a significant liability of the transfer duty’. The Applicants submitted that their ‘financial strain’ has been exacerbated by the fact that GZP’s employment had ‘recently ended’. During cross-examination, GZP stated that she had ceased her employment in February 2025 and was currently looking for another job. The Applicants stated that after meeting their essential financial commitments, including their mortgage obligations, they were left with insufficient funds to cover basic living expenses. The Applicants stated that they had discussed their financial situation with an Anglicare financial counsellor, free of charge, who had advised them that they were in deficit.

117. The Applicants have not provided any reliable evidence to support their submissions and statements in relation to their current financial situation. GZP’s cessation of employment occurred in February 2025, well after the tax default occurred. The Applicants decided to sell the property less than six months after they purchased it for $100,000 more than the purchase price, for financial gain, and buy a more expensive property. The Tribunal therefore does not accept the Applicants’ submission that interest should be remitted on the grounds of financial hardship.

118. There was no evidence before the Tribunal of any exceptional circumstances that would warrant the remission of the premium component of interest. The Tribunal is therefore not satisfied that the Applicants have demonstrated any exceptional circumstances to warrant the remission of the premium rate component of interest.

Conclusion to Issue 3

119. The Tribunal is not satisfied that the Applicants took reasonable care to comply with their tax obligations or that there are any exceptional circumstances or any relevant circumstances, including any personal circumstances of the Applicants, to warrant remitting the premium rate component of interest.

Conclusion

120. The Tribunal has found that there is not a good reason to reduce the period of, or exempt the Applicants from, the residence requirement.

121. The Tribunal has found that there are no exceptional circumstances to warrant remitting the market rate component of interest.

122. The Tribunal has found that there are no relevant circumstances to warrant remitting the premium rate component of interest.

123. It follows that the correct and preferable decision is to affirm the Respondent’s decision to revoke the Applicants’ exemption from transfer duty, such that the Applicants pay the transfer duty on the property and the interest charged for the tax default.

Order

124. The decision under review is affirmed.

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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: 16 June 2025