Yan v Chief Commissioner of State Revenue

[2025] NSWCATAD 249

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Yan v Chief Commissioner of State Revenue [2025] NSWCATAD 249

Hearing dates:

28 August 2025

Date of orders:

02 October 2025

Decision date:

02 October 2025

Jurisdiction:

Administrative and Equal Opportunity Division

Before:

T Davy, Senior Member

Decision:

The Chief Commissioner’s decision under review is affirmed.

Catchwords:

TAXES AND DUTIES — Land tax — Surcharge land tax — Foreign person

Legislation Cited:

Duties Act 1997 (NSW)

Foreign Acquisitions and Takeovers Act 1975 (Cth)

Land Tax Act 1956 (NSW)

State Revenue Legislation Amendment (Budget Measures) Act 2016

Taxation Administration Act 1996 (NSW)

Cases Cited:

Commissioner of Taxation v Ryan (2000) 201 CLR 109

Sjarifudin v Chief Commissioner of State Revenue [2021] NSWCATAD 347

Texts Cited:

None

Category:

Principal judgment

Parties:

Erchang Yan (Applicant)
Chief Commissioner of State Revenue (Respondent)

Representation:

Counsel:
M Carpenter (Respondent)
Solicitors:
Applicant (Self Represented)
Crown Solicitor (Respondent)

File Number(s):

2024/00462900

REASONS FOR DECISION

1. These proceedings concern an application for review of an assessment of surcharge land tax made by the Chief Commissioner of State Revenue (“Commissioner”) for the 2019 – 2023 land tax years in respect of property situated in Gordon (“the property”). At all relevant times the property was owned by Erchang Yan (“the landowner”).

2. On 3 September 2024 the Commissioner determined that the landowner was liable for surcharge land tax under section 5A of the Land Tax Act 1956 (NSW) (‘LTA’) for the 2019 to 2023 tax years (“the decision”).

3. For the reasons set out below I have decided that the correct and preferable decision is to affirm the decision of the Commissioner.

Material facts

4. The landowner is a citizen of the People’s Republic of China. He purchased the property in 2013. His son, Jun Yan, who appeared in these proceedings on his behalf, lived in the property until sometime in 2015 when he and his family moved to China. Noone from Mr Yan’s family resided in the property in the period 2015 to 2019. There is conflicting evidence about whether Mr Yan resided in the property in the period 2019 to 2023, however for the reasons set out below, it is not necessary for me to resolve that question.

5. The landowner did not reside in Australia at all between 2015 and 2019 and only resided in Australia for up to 3 months in each year in the period 2019 to 2023. In the relevant period he did not have a right of permanent residence in Australia.

6. On 9 August 2024 the Commissioner issued a notice of investigation in which he requested that the landowner lodge a land tax return in order to assist the Commissioner in determining whether the landowner had a land tax or land tax surcharge liability in respect of the property.

7. On 3 September 2024 the Commissioner issued an assessment notice for the land tax years 2019 to 2023 to the landowner in the amount of $56,734.95.

8. No interest or penalties were imposed in relation to the assessment.

9. The land tax assessment indicated that the amount was to be paid by 4 November 2024. Interest accrued in relation to the amount due and payable from 4 November 2024 until it was paid in sometime in April or May 2025.

10. On 21 October 2024 Mr Yan lodged an objection to the assessment on behalf of the landowner, for whom he holds a power of attorney.

11. On 28 October 2024, the Commissioner disallowed the objection and on 11 December 2024 the landowner commenced proceedings seeking administrative review.

Jurisdiction

12. Section 96(1)(a) of the Taxation Administration Act 1996 (NSW) (‘TAA’) provides that a taxpayer can apply to the Civil and Administrative Tribunal for a review of the decision of the Chief Commissioner if the taxpayer is dissatisfied with the Chief Commissioner’s determination of the taxpayer’s objection.

13. I am satisfied that I have jurisdiction to hear and determine this application.

Landowner’s contentions

14. At the hearing the landowner acknowledged that the Commissioner was entitled to issue assessments and that no exemption applied to the landowner.

15. At the hearing the landowner contended that:

1. At the time he purchased the property surcharge land tax had not come into effect

2. He did not receive any notice that he may be required to pay surcharge land tax until he received the Notice of Assessment in September 2024.

3. The lack of clear communication and timely notice have placed a heavy financial burden on the landowner.

4. The applicant requested that the Tribunal exercise a discretion to waive the surcharge land tax based on an application of fairness and reasonableness.

Commissioner’s contentions

16. The Commissioner contended that the landowner is liable for surcharge land tax as he was not ordinarily resident in Australia and was a “foreign person” for the purpose of the LTA.

17. The Commissioner argued that the Tribunal does not have the power to waive interest imposed on an assessment after the due date or a discretion to grant an exemption or waiver in relation to the imposition of surcharge land tax where the statutory criteria have not been met.

Applicable law

18. Surcharge land tax was introduced by the State Revenue Legislation Amendment (Budget Measures) Act 2016 (NSW) commencing on 28 June 2016.

19. It is an annual tax based on the ownership of property held at the taxing date (being midnight on 31 December in any year) payable under the LTA on “residential land” owned by a “foreign person”: LTA, s 5A.

20. Section 104J(1) of the Duties Act 1997 (NSW) defines a "foreign person" as "a person who is a foreign person within the meaning of the Foreign Acquisitions and Takeovers Act 1975, of the Commonwealth as modified by this section". The modifications in that section are not relevant to the present application.

21. Section 4 of the FATA states that a foreign person means "an individual not ordinarily resident in Australia". In relation to that definition, FATA, s 5 provides:

5 Meaning of ordinarily resident

(1) An individual who is not an Australian citizen is ordinarily resident in Australia at a particular time if and only if:

(a) the individual has actually been in Australia during 200 or more days in the period of 12 months immediately preceding that time; and

(b) at that time:

(i) the individual is in Australia and the individual's continued presence in Australia is not subject to any limitation as to time imposed by law; or

(ii) the individual is not in Australia but, immediately before the individual's most recent departure from Australia, the individual's continued presence in Australia was not subject to any limitation as to time imposed by law.

22. Section 5B of the LTA provides an exemption to surcharge land tax where the land is the principal place of residence of the landowner and the landowner is a permanent resident of Australia. It also includes a requirement that the residence be occupied for a continuous period of 200 days in each tax year.

23. The landowner bears the onus of proof in respect of his application: s 100(3) of the TAA.

Consideration

24. Given the landowner’s concession that the Commissioner was empowered to and correctly issues surcharge land tax assessments, the only question before me is whether there is any power or basis for the Tribunal to waive or exempt landowners on the basis of fairness or delay.

25. This question was considered in Sjarifudin v Chief Commissioner of State Revenue [2021] NSWCATAD 347 at [46], where it was held that there is no legislative provision or authority which gives the Commissioner or the Tribunal a discretionary power to exempt a taxpayer from surcharge land tax if the statutory criteria are not met.

26. The Tribunal is a forum which derives all of its power from statutes. Arguments based on notions of “fairness” or “justice” cannot succeed in the absence of any foundation in the legislation: Commissioner of Taxation v Ryan (2000) 201 CLR 109 at 123.

27. Considerations of whether the landowner was aware of the existence of the power of the Commissioner to levy land tax or whether the Commissioner could have notified the landowner of their liability at an earlier time are not relevant to the question as to whether the Commissioner has appropriately issued surcharge land tax assessments.

28. I find that given that the landowner has conceded that the statutory criteria for an exemption from land tax surcharge in the LTA has not been met and there is no other statutory power to exempt the landowner from surcharge land tax on the basis of unfairness, the landowner is not entitled to an exemption or waiver from surcharge land tax or the interest imposed on the liability after it has become due and payable.

Orders

29. I make the following orders:

1. The Chief Commissioner’s 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: 02 October 2025