Scheuerle v Chief Commissioner of State Revenue

[2006] NSWADT 324

CITATION:	Scheuerle v Chief Commissioner of State Revenue [2006] NSWADT 324
DIVISION:	Revenue Division
PARTIES:	APPLICANT Marjorie Scheuerle RESPONDENT Chief Commissioner of State Revenue
FILE NUMBER:	066075
HEARING DATES:	On the papers
SUBMISSIONS CLOSED:	09/26/2006
DATE OF DECISION:	11/13/2006
BEFORE:	O'Connor K - DCJ (President)
CATCHWORDS:	Review of determination
MATTER FOR DECISION:	Principal application
LEGISLATION CITED:	Land Tax Management Act 1956 Taxation Administration Act 1996
REPRESENTATION:	APPLICANT W Aldham, agent RESPONDENT S Benjamin, agent
ORDERS:	Decision under review affirmed.

REASONS FOR DECISION

1 The applicant has applied for review of a determination by the respondent (the Commissioner) made under the Land Tax Management Act 1956 (the Act) disallowing the applicant’s objection to an assessment for the payment of land tax. The affected land is the site of a residence at Blackheath, which for many years was the home of the applicant. Due to advancing age and infirmity (she is now 90 years of age) the applicant moved around October 1999 to Victoria to live with her sister. As a result the home was rented out. It is not disputed that the property has been continuously tenanted since October 1999.

2 The property fell subject to land tax for the first time in respect of the 2005 tax year. Prior to that time it had fallen below the tax threshold. According to the Commissioner’s statement of reasons for decision: ‘The property attracted land tax only due to the abolishing of tax-free threshold a part of the Mini-Budget that was announced by the Government during April 2004.’

3 The payment was made promptly under protest. The amount due was $920, and a discount of $13.80 was applied for prompt payment. During 2006 the applicant sold the property, and used the proceeds to buy a residence for her use in Victoria.

4 Section 7 provides:

‘Land tax at such rates as may be fixed by any Act is to be levied and paid on the land value of all land situated in New South Wales which is owned by taxpayers (other than land which is exempt from taxation under this Act).’
5 Land tax is charged on land as owned at midnight on the 31st day of December immediately preceding the year for which the land tax is levied (s 8). There is no dispute that the applicant was the owner of the affected land on 31 December 2004 and that, in the instance of the 2005 tax year, it was liable to tax unless exempt. The applicant’s claim is that her place falls within the exemption given by s 10(1)(r), which provides relevantly:
‘ 10 Land exempted from tax

(1) Except where otherwise expressly provided in this Act the following lands shall, …, be exempted from taxation under this Act: …

(r) land that is exempt from taxation under the principal place of residence exemption, as provided for by Schedule 1A.’

6 The Act provides (s 3):
‘ principal place of residence of a person means the one place of residence that is, among the one or more places of residence of the person within and outside Australia, the principal place of residence of the person.’
7 Schedule 1A deals in some detail with the way the principal place of residence is applied. Relevantly to a case of the present kind, cl 2(2) of Schedule 1A provides that the exemption only applies where the land has been ‘continuously used and occupied by the person for residential purposes’ since 1 July in the year preceding the tax year, i.e. for at least 6 months.

8 The applicant makes these points: that until she decided to move to Victoria, the property had always been her principal place of residence; that she is not an investor, as is evidenced by the fact that the property was owned outright and not subject to mortgage while it earned rent (and so was not negatively geared); that the rent was used by her to supplement her Centrelink pension income; the pension was reduced to take account of the rent; and that it is unfair to someone in her circumstances and a hardship for her to be required to pay land tax in these circumstances.

9 None of these submissions address the obvious problem that the land did not, on any view of the circumstances, constitute her principal place of residence at the applicable time. It is not necessary to deal at length with the meaning of ‘place of residence’. Clearly, the term refers to a place which the taxpayer occupies as their ordinary place of living and shelter. There are extensive discussions of the meaning of ‘residence’ in some decisions of the Tribunal at first instance and Appeal Panel level, but it is unnecessary to consider them here. No claim is made by the applicant that she occupied the residence at any time on any type of domestic basis during the relevant period.

10 Her case might be seen as a claim of hardship. As the Commissioner has noted in his reasons for decision, there is a separate facility provided by the legislation for the consideration of hardship claims – an application to the Hardship Review Board constituted under s 106A of the Taxation Administration Act 1996.

Order

Decision under review affirmed.