The Court of Appeal of the Supreme Court of Victoria has unanimously allowed the taxpayer’s appeal from the decision in Comr of State Revenue v Kameel Pty Ltd [2015] VSC 229 in which the Court held that the taxpayer, as vendor of a parcel of commercial property was liable for land tax in the 2010 to 2012 land tax years on the basis that it was the owner of the land under an uncompleted contract of sale. The matter turned on the interpretation and application of s15 of the Land Tax Act (Vic) which provides that a purchaser of land under a contract of sale is deemed to be the owner of the land if they have taken possession of the land regardless of whether or not the contract has been completed by the transfer of the land.
In particular, the Court of Appeal found that the test had not been correctly applied by the Court (or Tribunal) at first instance and that the Court was wrong to conclude that the purchaser had no right to possession under the contract and that the purchaser had not taken possession of the land under such a right in the capacity of purchaser. Instead, the Court of Appeal found that “de facto possession” of the land, without a specific legal right to possession under the contract, was sufficient to satisfy s 15 of the Act and that therefore the purchaser had taken possession of the land in the intended execution of the contract of sale before the earliest relevant date of the assessment for land tax.
(Kameel Pty Ltd v Comr of State Revenue [2016] VSCA 83, Supreme Court of Victoria, Warren CJ, Tate and Whelan JJA, 2 May 2016.)
Note: s16 of the Land Tax Act relieves vendors from being a relevant ‘owner’ of the land.
[LTN 81, 2/5/16]