In a decision handed down on Mon 6.5.2013, the NSW Administrative Decisions Tribunal affirmed a decision of the Chief Commissioner of State Revenue (NSW) refusing a taxpayer’s claim for the primary production land tax exemption for a rural property for the 2009 and 2011 land tax years.
The taxpayer purchased the property in August 2008 and claimed the primary production exemption on the basis of various activities conducted on the land (ie apiary production, aquaculture, herb and vegetable production, cattle, poultry and goats). However, the Commissioner considered that the dominant use of the land was the house on the property generating rental income and issued land tax assessments for the 2009 to 2011 tax years. The Commissioner allowed the exemption for the 2012 year.
The Tribunal heard various details as to the taxpayer’s farm-related activities, including set-backs in establishing his farm business, as well as details as to his income from other sources (eg employment as a business analyst etc) over the years. The taxpayer, among other things, argued there was long lead time in establishing a farm business and that the law should not discriminate against those who have to work to obtain their start in primary production. The Tribunal found the taxpayer had not discharged the onus of proving that the dominant use of the land was primary production for the relevant years per s 10AA(3) of the Land Tax Management Act 1956 (NSW). The Tribunal held that an objective observer would conclude, viewing the land as a whole, that the dominant use of the property for the 2009 to 2011 tax years was the leasing of the house, and not for primary production.
(Reolon v Chief Comr of State Revenue [2013] NSWADT 96, NSW Administrative Decisions Tribunal, Walker JM, 6 May 2013.)
[LTN 84, 6/5/13]