The ACT Civil and Administrative Tribunal has revised the penalty tax payable by 2 taxpayers in relation to a land tax default concerning a rental property for the period 1 July 2002 to 30 June 2012.
In 2001, the taxpayers (a couple) purchased the property and leased it to the Defence Housing Authority. The lease was registered with the Land Titles Office, however, the ACT Revenue Office did not have a record of receiving a Residential Land Tax notification form from the taxpayers at that time. The property remained leased until it was sold in May 2012. Following an inquiry received by the ACT Revenue Office from a prospective purchaser, the Commissioner commenced an investigation into the property and after contacting the taxpayer’s solicitor, received a completed land tax notification form. The Commissioner then assessed land tax for the period 1 July 2002 to 30 June 2012, which together with 50% penalty tax and interest amounted to $37,719. The taxpayers did not dispute the land tax but argued that there should be no penalty or that the penalty should be reduced. Among other things, the taxpayers argued that they had provided the notification form.
The Tribunal was satisfied that the taxpayers had not notified the Commissioner of the rental status of the property. It also noted different legislative regimes which governed the imposition of penalty tax for the relevant periods. In doing so, it held that penalty tax at 200% should be imposed in relation to the period 1 July 2002 to 30 June 2004, and penalty tax at 50% should be imposed in relation to the period 1 July 2004 to 30 June 2012.
(James & Comr for ACT Revenue (Administrative Review) [2013] ACAT 32, ACT Civil and Administrative Tribunal, Daniel M, 8 May 2013.)
[LTN 88, 10/5/13]