A couple (husband and wife taxpayers) has been unsuccessful before the NSW Court of Appeal in seeking an appeal against an earlier decision which had denied their claim for the primary production land tax exemption under s 10AA of the Land Tax Management Act 1956 (NSW) in respect of a property for the 2007 to 2011 land tax years.
The taxpayers claimed the dominant use of the land was for primary production (specifically, thoroughbred horse breeding). A small portion of the land (approximately 5%) was fenced off from the remainder and contained a residence, which was let out to a tenant by the taxpayers. The remainder of the land was allegedly used for primary production.
At first instance, the NSW Administrative Decisions Tribunal found that only a small number of horses were ever present on the land and that any primary production activity was altogether minimal. The Commissioner’s decision was affirmed. The taxpayers then appealed to the NSW Appeal Panel of the Tribunal, which dismissed the appeal.
The NSW Court of Appeal unanimously dismissed the appeal. Among other things, it held the Tribunal was correct in weighing the use of the land for rental purposes against the other uses of the land in determining which use was dominant, and in considering the parcel of the land as a whole and not as separate parcels.
(Ferella & Anor v Chief Comr of State Revenue [2014] NSWCA 378, NSW Court of Appeal, Barrett JA, Leeming JA and White J, 10 November 2014.)
[LTN 223, 18/11/14]