Riverside Parklands Pty Ltd v Commissioner of State Revenue
[2017] QCAT 104
•3 April 2017
CITATION: | Riverside Parklands Pty Ltd v Commissioner of State Revenue [2017] QCAT 104 |
PARTIES: | Riverside Parklands Pty Ltd |
| v | |
| Commissioner of State Revenue (Respondent) | |
APPLICATION NUMBER: | GAR077-16 |
| MATTER TYPE: | General administrative review matters |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Dr Cullen, Member |
DELIVERED ON: | 3 April 2017 |
DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. The Application for Review by Riverside Parklands Pty Ltd is dismissed. 2. The decision of the Commissioner of State Revenue to disallow the Applicant’s objection in respect of reassessment of land tax for the 2015-16 financial year is confirmed. |
CATCHWORDS: | TAXES AND DUTIES – LAND TAX – VALUATION – GENERAL PRINCIPLES – where land subject of valuation was previously subdivided – where previous titles were cancelled on subdivision – where objector seeks application of averaged value in s 18 of the Land Tax Act 2010 of lots prior to subdivision – whether resurveyed land is the same land as previous lots – whether averaged value in s 18 of the Land Tax Act 2010 can apply after resurvey – application of averaged value to land for purposes of s 18 of the Land Tax Act Land Tax Act 2010 (Qld), s 18, s 32(1)(b) Greendale Developments Pty Ltd v Commissioner of State Revenue [2013] QSC 326 |
APPEARANCES: |
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).
REASONS FOR DECISION
In this matter, the Tribunal must determine the proper application of s 18 of the Land Tax Act 2010 (Qld) (‘Land Tax Act’). The Commissioner of State Revenue (‘the Commissioner’) made a decision to disallow the applicant, Riverside Parklands Pty Ltd’s (‘Riverside Parklands’), objection to a land tax reassessment for the 2015-16 financial year.
Riverside Parklands seeks review of the 29 March 2016 decision of the Commissioner, wherein the Commissioner determined that s 18(1)(b) of the Land Tax Act was applicable to the assessment of land tax for Riverside Parklands.
The parties agree that, pursuant to the Land Tax Act, land tax is imposed upon the taxable value of all taxable land each financial year, with liability arising at midnight on 30 June immediately preceding the financial year.[1]
[1]Land Tax Act, s 6, s 7, s 8, s 9, s 10.
Generally, liability for land tax is assessed on the total taxable value of all taxable land owned by the taxpayer at the relevant 30 June date.[2] It is then the case that the total taxable value of all land owned by a taxpayer is applied to the Land Tax Act’s relevant prescribed rate. In Riverside Parkland’s circumstances, the relevant prescribed rate is that contained in Schedule 2 of the Land Tax Act.[3]
[2]Ibid, s 19, s 20, s 21.
[3]Ibid, s 32(1)(b).
Subdivision of Riverside Parklands’ Lots 6 and 7
The dispute relates to the values attributed to Property ID 41179782, which comprised Lot 6 on SP193947 and Lot 7 on SP241607 as at 30 June 2015, valued at $17million. The title to Lot 6 on SP193947 was created on 15 October 2013. However, the title to Lot 6 was fully cancelled on 5 August 2015 when it was subdivided into Lots 502 and 900-902 on SP206786.[4]
[4]Respondent Commissioner of State Revenue’s Submissions, filed in QCAT on 1 June 2016, Paragraph 6, referring to relevant sections of Respondent’s QCAT s21 documents.
The title to Lot 7 on SP241607 was created on 4 July 2011. This title was also fully cancelled on 5 August 2015, when it was subdivided into lots 502, 901 and 902 on SP206786.[5]
[5]Ibid.
Section 18(1) of the Land Tax Act sets out the concept that applies for purposes of the legislation to ‘averaged value’ as follows:
18 Averaged value
(1) The averaged value, of land for a financial year, is—
(a)if there are Land Valuation Act values of the land for the financial year and the previous 2 financial years—the amount that is the average of those 3 values; or
(b)otherwise—the amount equal to the Land Valuation Act value of the land for the financial year multiplied by the averaging factor for the year.
(2) For subsection (1), the averaging factor for a financial year is the number calculated to 2 decimal places using the following formula—
where—
T means the total of the Land Valuation Act values, for the financial year and the previous 2 financial years, of all land for which there is or was a Land Valuation Act value for that year.
V means the total of the Land Valuation Act values of all land for which there is a Land Valuation Act value for the financial year.
The dispute before the Tribunal has arisen because the Commissioner determined that s 18(1)(a) did not apply for the reason that the relevant land did not have Land Valuation Act 2010 (Qld) (‘Land Valuation Act’) values for the previous two financial years. Whilst there is a Land Valuation Act value as at 30 June 2014 of $15.5million, there was no Land Valuation Act value for 30 June 2013. What the Commissioner says this means is that s 18(1)(b), in combination with s 18(2) of the Land Tax Act apply, and the averaging factor of 0.96 is applied to the land valuation.
If s 18(1)(a) was applicable in these circumstances, it would result in Riverside Parklands paying significantly less land tax for the period in dispute. Riverside Parklands says that from October 2013, the property for purposes of the Land Tax Act consisted of Lot 6 SP193947 and Lot 7 SP241607. Prior to October 2013, the property consisted of Lots 6 and 7 on SP241607.
Nature of the dispute – Is Riverside Parkland’s resurveyed land same-same or different?
In short compass, Riverside Parklands’ argument is that the creation of the new Lot 6 on SP193947 and the corresponding deletion of Lot 6 on SP241607 was simply the consequence of the property being resurveyed to facilitate dedication of a new road, in order to comply with a development approval. Riverside Parklands argues that there has been no change in the valuation of the property, as the consequence of what is a reduction in the area of land in order to accommodate the new road.
In support of this assertion, Riverside Parklands notes that the Department of Natural Resources and Mines (‘DNRM’) had determined that the value of the property for the purposes of the Land Valuation Act2010 (Qld) was $3million as at 30 June 2013, prior to the creation of new Lot 6 and the reduction in the area of land. Thereafter, as of 13 October 2013, DNRM determined that the value of the property containing new Lot 6 was also $3million. The Commissioner says that the earliest valuation for the land was therefore at 11 October 2013, lending support to the Commissioner’s argument that s 18(1)(a) could not apply for the reason that there were not Land Valuation Act values for the previous two financial years.
The Commissioner says that despite Riverside Parklands’ assertions that the DNRM valuations are the same on 30 June 2013 and 11 October 2013, they do not in fact relate to the same land, as defined at law. This is because the 30 June 2013 value of $3million relates to property ID 40177323 (Lots 6 & 7 on SP241607); whereas on 11 October 2013, property ID 40177323, and Lot 6 on SP241607, had been cancelled. The 11 October 2013 valuation relates to property ID 41179782 (Lot 6 on SP193947 and Lot 7 on SP241607).
The Commissioner says that the Land Tax Act makes it clear that it adopts Land Valuation Act values only, and that the Land Valuation Act definitions of ‘land’, ‘lots’ and ‘parcel’ and Land Title Act 1994 (Qld) definition of ‘lot,’ make it plain that the Torrens system applicable in Queensland is one of ‘title by registration’ and not ‘registration by title’.
The importance of these legislative definitions, according to the Commissioner, is that the legislature has evinced an intention for ‘land’ to take on a legal meaning. The Commissioner contends that this, in conjunction with the Torrens system of title by registration, supports its argument that its application of s 18(1)(a) is correct.
Riverside Parklands contends for a purposive construction to be given to s 18(1)(a), so that they are not ‘deprived of the earlier valuation… merely due to a technical change in the way in which the property is particularised on the cadastral plan survey or in the land registry’.[6]
Land must take on its juridical definition for Land Tax Act purposes
[6]Riverside Parklands’ “Attachment to Form 23”, paragraph [22].
In the Tribunal’s view, it is not the physical description or boundary of the land that is important in determining whether a Land Valuation Act value exists. The Tribunal accepts that, as the Commissioner contends, the legal definition of the land in question is the determining factor. In other words if, for whatever reason, the property ID changes, the Land Valuation Act values applicable to s 18(1)(a) are the Land Valuation Act values referable to the current property ID.
The earliest valuation for property ID 41179782 (Lot 6 on SP193947 and Lot 7 on SP241607) is 11 October 2013; and the latest valuation is for 30 June 2015. For property ID 40177323 (Lots 6 & 7 on SP241607), the earliest valuation is for 1 July 2011, and the latest valuation is for 30 June 2013. The Tribunal agrees with the Commissioner’s submission that this means that there was no Land Valuation Act value of ‘the land’ on 30 June 2013, consistent with the decision of the Supreme Court of Queensland (McMurdo, P, J) in Greendale Developments Pty Ltd v Commissioner of State Revenue (‘Greendale’).[7] In Greendale, His Honour Justice McMurdo, P determined that aggregating separate values would be inconsistent with the Land Tax Act, which is based on the necessary assumption that ‘at any point in time certain land will have but one value’.[8]
[7][2013] QSC 326, at paras [19] – [21].
[8]Ibid, at paras [25] – [26].
Following from this, s 18(1)(a) cannot be used to combine two values for one set of land holdings with a third value for different land holdings. In these circumstances, this means that the Tribunal determines that the definition of ‘land’ applicable is not to be, as Riverside Parklands asserts, construed by its physical characteristics but rather, as the Commissioner contends, is to be determined by virtue of its legal characteristics and description under Torrens title.
One can readily imagine the difficulties that would exist in a Torrens title system if land taxpayers were able to assert that despite changes in Torrens title descriptions, as the physical characteristics of the land remained the same, there should be no net change in tax. That would be contrary to the purpose of the Torrens register system and its reliance on a legal, as opposed to a physical, definition of registered land.
In support of its argument, the Commissioner refers the Tribunal to the decision of the Land Court in McDowall Village Shopping Centre Pty Ltd as Trustee v Commissioner of Land Tax (‘McDowall’).[9] In McDowall it was determined that land for land tax purposes takes on its juridical meaning (footnotes omitted):
What is to be valued is not the “inanimate tangible thing, land” but “rights in land” because s.3C(2) requires that the unimproved value of the fee simple is to be determined. Put another way, I consider that in interpreting the word “land” in s.3AA the juridical concept is to be applied because s.3C required that the unimproved value of the fee simple in the land is to be determined.
[9][2009] QLC 1.
The Commissioner also refers the Tribunal to the New South Wales Administrative Decisions Tribunal decision in TKB Developments Pty Ltd v Chief Commissioner of State Revenue (‘TKB Developments’)[10]. The circumstances in TKB Developments were remarkably similar to those now before this Tribunal – there, the taxpayer sought a determination that 3-year averaging should apply to the taxpayer’s property holdings, for land tax purposes.
[10][2010] NSWADT 79.
Judicial Member Block determined that, as the relevant parcels of land came into existence on November of 2010, there was no land value for the 2007 and 2008 land tax years, and therefore no basis to apply 3-year averaging. This was, according to the Commissioner, for the obvious reason that there were not 3-years, and the legislative application of 3-year averaging was not triggered. It is difficult to find a basis to disagree with the Commissioner’s assertion in this respect.
In similar fashion, although the Tribunal accepts that Riverside Parklands will pay more land tax, the Tribunal considers that the appropriate legal definition of land has been applied by the Commissioner. As there were not Land Valuation Act values for the previous two financial years, the Commissioner has correctly applied s 18(1)(b) of the Land Tax Act to Riverside Parklands’ assessment.
Orders
The Application for Review by Riverside Parklands Pty Ltd is dismissed.
The decision of the Commissioner of State Revenue to disallow the Applicant’s objection in respect of the reassessment of land tax for the 2015-16 financial year is confirmed.
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