Haigh Developments Pty Ltd v Commissioner of State Revenue
[2013] QCAT 600
•4 November 2013
| CITATION: | Haigh Developments Pty Ltd v Commissioner of State Revenue [2013] QCAT 600 |
| PARTIES: | Haigh Developments Pty Ltd (Applicant) |
| v | |
| Commissioner of State Revenue (Respondent) |
| APPLICATION NUMBER: | GAR136-12 and GAR137-12 |
| MATTER TYPE: | General administrative review matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Member Allen |
| DELIVERED ON: | 4 November 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | GAR137-12 1. The decision of the Commissioner of State Revenue to disallow the objection in respect of the reassessment of land tax for the 2009-10 financial year is confirmed. GAR136-12 1. . The decision of the Commissioner of State Revenue to disallow the objection in respect of assessment of land tax for the 2010-11 financial year is confirmed. |
| CATCHWORDS: | LAND TAX – Availability of discount for subdivided land – who is the owner of land at relevant times – what constitutes possession of land REVIEW OF DECISIONS - admission of new evidence Land Tax Act 1915 ss 3B, 3CA and 12 Commissioner of Land Tax v Manors of Mosman Pty Ltd 34 NSWLR 94 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
Introduction
Haigh Developments became the registered owner of various parcels of land which are subject to Land Tax just prior to 30 June 2009. It is the owner of land as at 30 June each year who is subject to land tax[1]. While it was accepted that Haigh Developments would be subject to Land Tax for the 2009/2010 and subsequent years it was anticipated that there would be a discount of 40% applied to the value of the land as a result of the application of a concession available under s 3CA of the Land Tax Act 1915 in respect of the 2009/10 year and s 30 of the Land Tax Act 2010 in respect of subsequent years. This discount is available where a larger parcel of land has been subdivided and the owner of a part of the land following subdivision which is held for sale as at 30 June is the person who owned the original larger parcel of land.
[1]Land Tax Act 1915 s 12, Land Tax Act 2010 s 7 (the Land Tax Act 1915 was repealed by s 87 of the Land Tax Act 2010 but continues to apply in relation to this review by virtue of s 89 of the LTA 2010).
The Office of State Revenue did not consider that the concession applied and made a decision on 22 February 2012 to disallow Haigh Developments objection against a Land Tax reassessment for the 2009/2010 year in the amount of $64,814.88 and a land tax assessment for the 2010/2011 year in the amount of $144,994.80. Haigh Developments has applied to the Tribunal to review those decisions[2]. The Tribunal when reviewing such a decision steps into the shoes of the decision-maker and the review is by way of a fresh hearing on the merits[3], subject to the Taxation Administration Act 2001 as discussed below, with the purpose of the review to produce the correct and preferable decision[4].
[2]QCAT Act s 17.
[3]QCAT Act s 20(2).
[4] QCAT Act s 20(1).
New evidence
A preliminary matter has arisen in respect of the evidence that Haigh Developments is seeking to put before the Tribunal. There has been new evidence filed by Haigh Developments in support of their application and the admissibility of this new evidence is contested by the Commissioner. This is as a result of the requirements of the enabling Act, that the Tribunal must hear and decide the review on a reconsideration of the evidence before the Commissioner when the decision was made, unless the Tribunal considers it necessary in the interests of justice to allow new evidence[5], which is defined as evidence that was not before the Commissioner when the decision on the objection was made[6].
[5] Taxation Administration Act 2001 s71(3)(a).
[6] Ibid s71(5).
The Commissioner in his submissions in regard to the admissibility of the new evidence sought to rely on the decision in Ratten v R[7]. That case involved an appeal to the High Court against a criminal conviction based on whether a new trial should be ordered because there was evidence available which had not been available at the trial. Barwick CJ stated in that
The rule in relation to civil trials is that evidence, on the production of which a new trial may be ordered, must be fresh evidence; that is to say, evidence which was not actually available to the appellant at the time of trial, or which could not then have been available to the appellant by the exercise on his part of reasonable diligence in the preparation of his case.
The decision of Senior Member Ballard in Gomez v Commonwealth of Australia [1988] AATA 647 was also cited. That decision involved an application to re-open a hearing so that evidence from a witness who had not been available for the hearing could be taken. Senior Member Ballard stated that
fresh evidence should be admitted “only when it is so material that the interests of justice require it, and the evidence if believed would probably affect the result, and further that the evidence could not by reasonable diligence have been discovered before” .. In Murray v Figge 4 ALR 612 it was added that fresh evidence should be added after it had been left out by inadvertence of counsel, where the evidence was admissible, it was ensured its admission would cause no prejudice to the other party, and it was in the interests of justice for the evidence to be allowed. However a matter should not be re-opened merely to permit a party to fortify evidence adduced in the first instance by calling witnesses who might easily have been available before, if due diligence had been shown.
[7] (1974) 131 CLR 510.
Mr Haigh submitted in regard to the additional documents set out in his statement and the supporting documents folder that he would have always supplied any document that his accountant would have requested from him. If he had needed additional documents Mr Haigh would have supplied them and it was not until Clayton Utz were retained that he was informed additional documents were required.
The Commissioner describes the additional evidence sought to be adduced by Haigh Developments as fresh evidence. There is no requirement here that the evidence be fresh evidence, as defined above, only that it be evidence that was not before the Commissioner which is clearly the case and that it be in the interests of justice to admit it. The submissions filed on behalf of Haigh Developments also note that the issue of fresh evidence is not raised in the definition of new evidence. The Tribunal is satisfied that where Haigh Developments would have produced the evidence to the Commissioner but for the fact that they were not alerted to the requirement for it by the person who was handling the objection for them, the company’s accountant that it is in the interests of justice to admit the new evidence. The admission of this material is analogous as well to the admission of evidence left out by the inadvertence of counsel as mentioned above.
The Tribunal notes that there is no prejudice to the Commissioner as they have provided submissions in regard to all of the new evidence presented by Haigh Developments.
History of the land
Mr Haigh provided an affidavit setting out the history of the land, its development and the dealings between Mr and Mrs Haigh and Haigh Developments. Mr Haigh and Mrs Haigh purchased 40.47 hectares of land described as Lot 5 on RP29891 at Samford Valley in 1989. When their children had grown up and following changes in the planning and development guidelines in regard to the land it was decided to subdivide it in the year 2000.
One of the first steps in the development process was an application for material change of use of the land which was made on 4 April 2004. During the process of the development application correspondence received from Pine Rivers Shire Council by the firm assisting in the application process, THG Resource Strategists was forwarded to Mr Doug Haigh with recommendations as to how to respond.
A valuation of the land was prepared by Herron Todd White on 14 July 2006 which assessed the value of Lot 5 on RP 29891 as $4,800,000.00 assuming zoning change and water allocation are likely to become available. The valuation excluded improvements.
Mr Haigh was a builder and familiar with companies. He states that it was intended that the development be done through a company. In this case Haigh Developments Pty Ltd which was incorporated on 1 August 2006.
On the same day, Mr and Mrs Haigh as vendors and Haigh Developments as purchasers executed a put and call option for lot 5 on Westwood Drive, Samford Valley, in accordance with an annexed plan excluding marked lots 15, 34, 35 and 36. The purchase price was $4,800,000.00 in accordance with the valuation. The call option was to expire 30 days after the sealing of the linen plans for the subdivision of the land. The put option start date was the expiry date of the call option with its expiry date being 30 days later.
The put option was to be exercised by notice in writing with a binding contract for the sale of the land deemed to have been entered at the same time. The vendor was to deliver two copies of the contract in the form annexed and the purchaser was to execute the contract within two business days. That annexed contract set out the land as the whole of Lot 5 on RP 29891 with a 60 day settlement and no special conditions. The standard conditions dealt with the giving of possession before settlement and it is stated that entry into possession is under a licence personal to the buyer. There is no indication on the face of the contract that possession before settlement was given.
The Put and Call Option Deed at clause 11 deals with the Purchaser’s right of access. The vendors in this clause authorise the purchaser and its officers, architects, surveyors, builders, contractors, real estate agents and other persons authorised by the purchasers to enter upon the land, for the following (a) to make enquiries, inspections and investigations in respect of the property for the purpose of making an Application (Defined as any development application prepared and/ or lodged by the purchaser with respect to the property (b) to erect any signs , notices or advertisements required in connection with the Application. It is required that 48 hours notice be given to the vendor of such entry, and entry shall be in such manner as to cause as little interference to the occupiers of the property as reasonably practicable. There is also a make good and indemnity provisions.
Clause 12 of the Put and Call Option Deed provides the vendors authorisation for the purchaser, at its cost, to make the applications with respect to development of the property. The vendor is to promptly sign any form of application, request or consent properly and reasonably necessary or legally required to facilitate the application.
By the time Haigh Developments had been incorporated Mr and Mrs Haigh had incurred around $50,000.00 in development expenses. A bank facility was obtained by the company from the National Australia Bank and Mr and Mrs Haigh were reimbursed their expenses on 27 October 2006. The banking facility was supported by a guarantee from Mr and Mrs Haigh with a mortgage over the Land. The banking facility was refinanced through the Westpac Bank in 2007 with major amounts being funded including $5,898,675.00 to 30 June 2009. The loan facility from Westpac was again supported by a guarantee from Mr and Mrs Haigh with a mortgage over the Land
There was also a transaction involving the purchase of water rights which was assessed by the Office of State Revenue in 2007. This nominated Haigh Developments as the developer. The Deed in respect of this matter which is dated 27 July 2007 states in part that the Developer (Haigh Developments) intends to develop the Land on behalf of the purchasers (Mr and Mrs Haigh). The assignment of water rights was from the Vendors, Bettson Properties Pty Ltd to Mr and Mrs Haigh as purchasers.
Invoices were provided for various contractors who were involved in the development and maintenance of the Land for the period from early 2007 and these invoices listed Haigh Developments as the other party to the transaction. There was also correspondence from Brown Consulting to Haigh Developments setting out the results of tenders for various aspects of the development process. The work being quoted for was for road works, drainage and water supply with a quoted amount in excess of $2,000,000. A copy of the notice of acceptance of the tender which shows Haigh Developments as the entity accepting the tender was also provided. The contract documents in respect of the construction works do not make any mention of Mr and Mrs Haigh.
Other documents were provided to show the involvement of Haigh Developments in the development of the Land such as a copy of an insurance policy note from Zurich Insurance dated 13 November 2008 which noted the company as an insured party on the insurance held by Mr and Mrs Haigh. Mr Haigh in his affidavit stated that a Q-Leave application had been made on 10 October 2007 with Haigh Developments as the applicant. The copy of the Q-Leave application filed in the Tribunal shows the Payers Legal Name as Douglas Haigh and trading name as Haigh Developments Pty Ltd.
Photos were annexed to Mr Haigh’s affidavit which show various stages of the development. It is said that these photos date to October 2007 with Haigh Developments as the developer. It was noted that the estate had always had a sign up at its commencement and it shows Haigh Developments as the developer and this sign was installed on or about 7 October 2004, prior to the incorporation of the company.
The plan of subdivision of Lot 5 on RP 29891 was certified by Heilbronn & Partners, surveyors on 9 July 2008 agreed to by Mr and Mrs Haigh as registered owners. Correspondence from THG Consulting to Mr Haigh dated 28 July 2008 enclosing a copy of the plan sealing application was also filed. This shows the applicant as Doug Haigh and lists the registered owners as Doug and Carmel Haigh and the occupiers as Doug and Carmel Haigh. The application is dated 22 July 2008.
A deed between the Moreton Bay Regional Council and Haigh Developments is also included in these documents Haigh Developments being described as The Developer and the company agreeing to ensure that if the plan is sealed all of the works will be completed within three months and that they will be maintained and defects remedied and any transfers of land to the council must be free of encumbrance.
The plan of subdivision was sealed by the Moreton Bay Regional Council on 10 February 2009.
The Put and Call Option Deed was amended on 30 April 2009 due to changes in the configuration of the lots in the sealed plans and delays encountered with council processes. The amended deed replaced the plan annexed to the original deed with the sealed plan of survey received from the Moreton Bay Regional Council. The description of the Land subject to the deed now read “Lot 5 Westwood Drive, Samford (as per the plan contained on annexure A excluding the areas marked Lots 22, 32, 33, and 15). There was a further amendment of the Put and Call Option Deed on 1 May 2009 to amend the number for the put option start date.
The copy of the historical title search for lot 5 on RP 29891 contained in Haigh Developments bundle of documents evidences that the survey plan number 712346789 subdividing lot 5 into lots 1-43 and 100 on SP210448 was lodged on 16 April 2009 and registered on 7 May 2009. The Commissioner has accepted that for the purpose of both the LTYA 1915 and LTA 2010 the date of the relevant date is 7 May 2009.
Mr Haigh stated in his affidavit that on 1 May 2009 Haigh Developments exercised its option and on the same day a contract was signed between Mr and Mrs Haigh as vendors and Haigh Developments as purchaser of the lots. The document evidencing the exercise of the option shows that it was the put option that was in fact exercised by Mr and Mrs Haigh on that date. The contract entered by the parties is in the same form as set out in the option deed and the property is described as Lot 5 on RP 29891 and there is no reservation of the lots which were required to be reserved in the option deed. There were no special conditions set out in the contract.
The transfer was prepared by Mills Oakley Lawyers and Mr and Mrs Haigh attended their office on 5 May 2009 to sign the transfer. The transfer does not include the lots which were reserved in the option deed. The copy of the transfer shows that it was executed by all of the parties on 5 May 2009. Mr Haigh states that he viewed a copy of the Form 24 and noted that the date 16 June 2009 appears opposite the date of settlement and possession and that this date was not inserted by Haigh Developments, the copy of the Form 24 confirms this as the dates set against possession and settlement.
Mr Haigh stated that as soon as the blocks were finalised they were immediately placed with various real estate agents. Haigh Developments is stated to have retained Harcourts at Samford as agent, this appointment had been made on 12 September 2008. While the client was stated to be Haigh Developments the signing clause listed Doug Haigh and Carmel Haigh. Apart from blocks 15 (the Haigh residence), 22, 32 and 33, all the other blocks were said to be available for sale. However, so as not to place all blocks on the market openly at once, they initially priced a number of blocks with the agent for sale. There were examples given where blocks not specifically marketed, lots 17 and 29, were subject to inquiry by potential purchasers and were sold before being listed.
A contract was already in place for the sale of lot 26 prior to the registration of the transfers with the vendor being Haigh Developments. The completion date of this contract was required to be extended several times until it settled on 19 June 2009. A copy of this contract was not provided it is assumed that there were special conditions dealings with the registration of the subdivision and the necessity for a transfer to Haigh Developments to register before this contract could settle.
Mills Oakley Lawyers had requested a private ruling from the Commissioner of State Revenue in regard to the amount of duty payable on the transfer of the Land in particular requesting that the transaction be assessed for duty based on the price set out in the option deed of $4,800,000.00. It was stated that this was a related party transaction as Mr and Mrs Haigh were the directors of Haigh Developments. It was also noted that Haigh Developments had paid for all of the improvements to the Land. The copy of the stamped contract shows that the consideration upon which duty was calculated was the amount of $4,800,000.00. On perusal of a copy of the stamped transfer this document was stamped on either 15 or 16 June 2009 and lodged for registration around the same date. Copies of various certificates of titles in respect of the subdivided lots are also included these show that the dealing was lodged on 16 June 2009.
The 2009/2010 Reassessment
While the two assessments are based on the same set of facts they are based on different Acts and so each of them will be treated separately. The applicable and relevant provisions of the Land Tax Act 1915 in regard to the 2009/10 reassessment are as follows:-
3B Meaning of owner
(1) The owner of land includes every person—
(a) other than a mortgagee in possession, who is, jointly or severally, entitled to—
(i) the land for an estate of freehold in possession; or
(ii) receive, or has received, the rents and profits from the land; or
(b) who is taken to be the owner under this Act.
(2) The person who is receiving the rents and profits of the land is taken to be the owner of the land while that receipt continues even though that person may have made some disposition of the land.
(3) If an agreement has been made for the sale of land, whether or not the agreement has been completed by conveyance—
(a) the seller is taken to be the owner of the land until possession of the land is delivered to the buyer; and
(b) the buyer is taken to be the owner of the land as soon as the buyer obtains possession of the land.
(4) However, the fact that a person is taken to be the owner of land under subsection (2) or (3) does not exclude someone else from being the owner.
3CA Discounting unimproved value of subdivided land in
particular cases
(1) This section applies to a parcel of land if—
(a) the parcel is one of the parts into which a larger parcel of land has been subdivided; and
(b) the person who subdivided the land (the subdivider) was, when the land was subdivided, the owner of the parcel; and
(c) when the land was subdivided, the parcel was not developed land; and
(d) since the land was subdivided, the parcel has been held for sale; and
(e) the parcel is not a balance lot; and
(f) at midnight on 30 June—
(i) the subdivider is still the owner of the parcel; and
(ii) the parcel is still not developed land.
(2) For levying land tax on the parcel for the following financial year, a reference to the unimproved value of the parcel is a reference to the value that, apart from this section, would be the unimproved value of the parcel, discounted by 40%.
(3) For this section, land is taken to be subdivided when a plan of subdivision, providing for the division of the land into lots, is registered under the Land Title Act 1994.
(4) Subsection (2) does not apply to a parcel of land—
(a) if the parcel is included in a valuation under the Valuation of Land Act 1944, section 34; or
(b) unless the parcel is 1 of at least 6 parcels of land in Queensland, owned by the subdivider, to which subsection (1) applies.
(5) In this section—
balance lot means a parcel of land that is—
(a) one of the parts into which land has been subdivided; and
(b) being held by the subdivider for further subdivision.
developed land means land improved, or being improved, by the construction of a building or other facility reasonably capable of being used.
In considering the application of s 3CA generally for the discount available under s 3CA(2) to apply all of the conditions in s 3CA(1) must be met. The first of these is set out in ss 3CA1(a) above. The parcels of land the subject of this application were parts of the original parcel of land described as Lot 5 on RP 29891 so that condition is satisfied.
The next condition is in ss 3CA(1)(b) in combination with ss 3CA(1)f(i) this requires that Haigh Developments must have been the person who subdivided the Land and the owner of the Land at the time it was subdivided and is still the owner as at 30 June. The applicable date for subdivision has been agreed by the parties to be 7 May 2009 in accordance with s 3CA(3) and the decision of President Trickett of the Land Court of Queensland in Cornish Group Pty Ltd v Commissioner of Land Tax[8].
[8] [2004] QLC 0010.
The question of who is the owner of land is determined in accordance with s 3B set out above. The submissions focus on three different aspects of the relationship between Mr and Mrs Haigh, Haigh Developments and the Land. These are the fact that Haigh Developments incurred all of the expenses in developing the Land and was the contracting party in respect of this development work; the Put and Call option Deed and the Contract for Sale.
The Tribunal accepts that Haigh Developments was the developer of the Land. There is no written agreement between the parties to evidence that Haigh Developments was appointed as developer of the Land though. The combination of Haigh Developments incurring the development costs and having the benefit of the Option Deed which enabled it to call upon a transfer of the finally subdivided lots for an amount of $4,800,000.00, which represented the valuation of the whole of the Land with future zoning and potential water right, shows that the intention was that Haigh Developments would ultimately obtain consideration by way of the transfer of the subdivided lots for the expenses it had incurred. With the right then to the fruits of the Land when it was able to sell the lots following subdivision and it becoming owner of those lots under a contract entered as a result of the exercise of the rights under the Option Deed.
The Tribunal notes that while Haigh Developments was able to freely enter the Land with its contractors during the period of development of the Land. Those rights were not granted by any agreement and that at all times Mr and Mrs Haigh continued to have the right to possession of those parts of the Land which were reserved to them in particular their lot which represented their home, which is lot 15. The relationship is more one of principal. Mr and Mrs Haigh and contractor, Haigh Developments with various sub-contractors employed.
It is said on behalf of Haigh Developments that clauses 11 and 12 of the Option Deed are sufficient to show that Haigh Developments was let into possession of the Land for the purpose of developing it. The Commissioner submits that those clauses only give a restricted right of access and an authority to make a development application. The Tribunal agrees with the Commissioner in this regard. It is clear that those clauses do not give possession of the Land to Haigh Developments for the purpose of developing it.
Therefore even if it were accepted that the Put and Call Option Deed were a contract for the sale of the Land, which is not agreed between the parties there is nothing in that agreement which would satisfy the requirement of s 3B(3)(b) of the Act that the buyer, Haigh Development has obtained possession and so become the owner of the Land in accordance with that Option Deed as there are no relevant clauses which grant possession. This means that Haigh Developments did not become the owner of the Land at the time the Option Deed was entered on 1 August 2006.
There is no evidence that Haigh Developments was granted possession as a precursor to settlement of any contract for sale. It was given full and free access to the Land, though not in accordance with the Option deed as that was a more limited grant for the purpose of carrying out the development. That is a normal incident of any arrangement between a land owner and developer, and does not connote the giving of ownership of the Land to Haigh Developments by Mr and Mrs Haig.
Following the exercise of the Put Option a contract was entered by the parties for the sale and purchase of the Land, which was described on the contract as Lot 5 on RP 28981, though as mentioned the transfer was for the lots as subdivided in accordance with the Option Deed. That contract was entered on 1 May 2009 and the plan of subdivision registered on 7 May 2009. If Haigh Developments became owner of the Land in accordance with the contract for sale between those two dates then s 3CA(b) may have been satisfied.
Was Haigh Developments entitled to an estate of freehold in possession in accordance with ss3B(1)(a)(1) which would have made it an owner of the Land? The rights of Haigh Development to an estate of freehold in possession were dependent on settlement of the contract for sale in accordance with clause 5.5 of the general conditions upon settlement of the contract. Therefore at the time of registration of the plan of subdivision on 7 may 2009 Haigh Developments was not an owner of the Land in accordance with that provision.
Was it entitled to receive or, has received the rents in accordance with s 3B(1)(b) and s 3B(2)? There was no provision in either of the Option Deed or contract for sale which gave Haigh Developments an entitlement to the rents and profits of the Land.
As a contract of sale has been entered then s 3B(3) applies so that the vendor, Mr and Mrs Haigh are the owner until possession is delivered to the buyer, Haigh Developments. It is asserted on behalf of Haigh Developments that clause 8.5 of the general conditions operates to grant possession to Haigh Developments. The Commissioner submits that that clause is prefaces by the words ‘If possession is given before settlement’ and so is not a grant of possession in itself. That is there is required to be a separate special condition which grants possession and that clause sets out the basis upon which possession is granted. The Tribunal agrees with the Commissioner that clause 8.5 does not in itself operate to grant possession and as there is no special condition dealing with the grant of possession then possession is granted in accordance with the general conditions at the time of settlement in accordance with general condition 5.6. Haigh Developments have not then become owner of the Land in accordance with s 3B(3) at the time when the contract was entered on 1 May 2009 but instead they have become owner at the time of settlement which was stated on the Form 24 to be 16 June 2009 which was some time after the Land had been subdivided on 7 May 2009.
Haigh Developments submitted that there were a number of cases which submitted the contention that the entry into the contract for sale in the circumstances where it had developed the land had the effect of granting possession of the land. These cases are Spinks v Commissioner of Land Tax [1963] QWN 37, Highlands Ltd v Deputy Federal Commissioner of Taxes (SA) (1931) 47 CLR 191, Commissioner of Land Tax (NSW) v Manors of Mosman Pty Ltd (1994) 29 ATR 269. The Commissioner submitted that all of these cases could be distinguished as there were special conditions in each of them which granted possession to the buyer. Having perused the decisions in question the Tribunal concurs with the Commissioner’s submissions that those cases are not applicable as in each of them there was a clause granting possession to the buyer.
In terms of s 3CA(1)(c) it is accepted that none of the Lots were developed lots as defined in s 3CA(5) as none of the lots had been improved by the construction of a building or other facility capable of being used.
Haigh Developments maintains that all of the lots were held for sale as mentioned above as required under s 3CA(d). Although it is clear that some of the lots were specifically listed though all of them were part of the trading stock of the company in financial statements. It is said that only some lots were listed for sale so that the market was not overwhelmed but if interest was shown in a particular lot a price was formulated. Examples were given of several lots which were sold without first having been listed following inquiries from interested parties.
The Commissioner submitted that the original objection letter had a lot for sale list attached and that Haigh Development should be limited to include lots on that list as being held for sale. The Tribunal notes that this objection was prepared by the company accountant who had misinterpreted the provision and thought that discount did not apply where lots were held for sale. While the Tribunal will have regard to that list it is not proposed to limit the lots held for sale to that list and the further submissions of Haigh Developments in regard to the lots held for sale will be taken into account.
The Commissioner has a Public Ruling LTA (1915) 003CA which deals with the interpretation of whether or not land is held for sale. The central question is whether or not there have been genuine efforts to sell the land within a reasonable time of subdivision. Having regard to the matters set out in the ruling in particular that the land was listed as trading stock, the estate was listed with various real estate agents, the state of the market at the time being subdued due to market conditions and evidence that where an approach was made by a potential buyer a price would be formulated to enable the buyer to make an offer the Tribunal is satisfied that all of the lots were held for sale as required under s 3CA(d).
There were no balance lots so s3CA(1)(e) is satisfied.
The Tribunal is not satisfied that Haigh Developments was the owner of the Land as at the time of subdivision on 7 May 2009 as required under s 3CA(1)(b) and therefore s 3CA(1)(f)(i) is not satisfied since it was the owner as at 30 June 2009 and the discount for the unimproved value of subdivided Land is not available to the company for the 2009/2010. The Commissioners decision in regard to the 2009/10 year is confirmed.
The 2010/2011 Assessment
The liability for land tax in 2010/11 year was assessed under the Land Tax Act 2010 the applicable provisions are as follows:-
10 Meaning of owner
(1) The owner of land includes the following—
(a) a person jointly or severally entitled to a freehold estate in the land who is in possession;
(b) a person jointly or severally entitled to receive rents and profits from the land;
(c) a person taken to be the owner of the land under this Act.
(2) The fact that a person is the owner of land under a provision of this Act does not prevent another person also being the owner of the land.
(3) This section is subject to sections 12 to 14, 22 and 23.
11 Sellers and buyers of land
(1) For this Act, if an agreement has been made for the sale of land—
(a) the seller is taken to be the owner of the land until the buyer is in possession of it; and
(b) the buyer is taken to be the owner of the land as soon as the buyer is in possession of it.
(2) This section applies whether or not the agreement has been completed.
30 Discounting of Land Valuation Act value—subdivided land not yet developed
(1) This section applies to a parcel (the relevant parcel) if—
(a) the relevant parcel is 1 of the parts into which a larger parcel has been subdivided; and
(b) the person who subdivided the larger parcel (the subdivider) was the owner of the larger parcel when it was subdivided; and
(c) when the larger parcel was subdivided, the relevant parcel was not developed land; and
(d) since the larger parcel was subdivided, the relevant parcel has been held for sale; and
(e) when a liability for land tax on the relevant parcel arises—
(i) the subdivider is still the owner of the relevant parcel; and
(ii) the relevant parcel is still not developed land and is not being held by the subdivider for further subdivision; and
(f) the Land Valuation Act value of the of the relevant parcel for the relevant financial year is not calculated under that
(g) the relevant parcel is 1 of at least 6 parcels into which the larger parcel has been subdivided that—
(i) are owned by the subdivider; and
(ii) satisfy paragraphs (a) to (e).
(2) For assessing the subdivider’s liability for land tax, the Land Valuation Act value of the relevant parcel must be discounted by 40%.
(3) For this section, land is taken to be subdivided when a plan of subdivision providing for the division of the land into lots is registered under the Land Title Act 1994.
(4) In this section—
developed land means land improved, or being improved, by the construction of a building or other improvement reasonably capable of being used.
Sections 10 and 11 of the LTA 2010 replace s 3B of the LTA 1915 in regard to ownership and the combined provisions are of the same effect as s 3B therefore the above analysis of the facts in accordance with s 3B applies equally in respect of an analysis under s 10 and s 11 of the LTA 2010 in the determination of when Haigh Developments became the owner of the Land. The relevant Public Ruling for the question of land is held for sale under the 2010 Act is LTA030.1.1. On that basis the company was not at the relevant times that is the 7 May 2009 and 30 June 2009 the owner of the Land as required under sections 30(1)(b) and 30(1)(e)(i) of the LTA 2010. The discount is then not available to Haigh Developments for the year 2010/11. The Commissioners decision is confirmed.
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