The Appeal Panel of the NSW Administrative Decisions Tribunal has allowed the Commissioner’s appeal against an earlier decision, which had held that a property was “used and occupied” by a taxpayer as his principal place of residence for the 2004 to 2007 land tax years.
The matter concerned a taxpayer who spent 6 weeks of the year at the subject property and spent the other 46 weeks at another property he owned (his former matrimonial home). At first instance, the NSW Administrative Decisions Tribunal held that the subject property was “used and occupied” by the taxpayer as his principal place of residence pursuant to clause 2(2)(b) of Sch 1A to the Land Tax Management Act 1956 (NSW).
The Appeal Panel noted the Tribunal accepted the taxpayer’s evidence that after his separation from his wife, he moved out and lived in the subject property while his wife remained in the former home. After the wife’s request that the former home be renovated, an arrangement was agreed to in which she moved out to the subject property while the taxpayer moved into the former home in order to renovate the property. During the years in question, the taxpayer and his wife swapped residences for about 3 weeks at a time twice a year. This was so the taxpayer could celebrate religious holidays and entertain friends in the subject property. The Tribunal also accepted the taxpayer’s evidence that once the renovations were completed, he intended to move back permanently to the subject property and his wife move back to the former home.
The Appeal Panel held the Tribunal had erred in its application of cl 2(2)(b). It held the subject property could not qualify as a “residence”, and accordingly was not the taxpayer’s principal place of residence for the relevant years. It said the present case was not analogous to the “competing residences” cases referred to by the Tribunal in which the taxpayers retained the ability to move between residences at will and without impediment. It held the other property was for those weeks the taxpayer’s place of residence. It added the fact that he returned to the subject property for limited periods each year did not convert that property into a “residence”. The Appeal Panel also held the taxpayer’s long-term intention to return to the property was not relevant for present purposes.
(Chief Comr of State Revenue v Ghali (RD) [2012] NSWADTAP 20, NSW Administrative Decisions Tribunal, Appeal Panel, O’Connor P, Hole JM, Bennett NJM, 7 June 2012.)
[LTN 110, 8/6]