An individual has been unsuccessful before the WA State Administrative Tribunal in seeking the private residential property land tax exemption under either ss 22 or 23A of the Land Tax Assessment Act 2002 (WA).
The taxpayer’s wife, who was the owner of the subject property, passed away in 2012. Since then, the taxpayer and one of their 4 adult children (a son) have both continued to live in the property as their home. The Commissioner assessed land tax for the 2013-14 and 2014-15 years. The taxpayer objected arguing the property was exempt because he and his son had a right to live in the home under his late wife’s will. In this regard, the taxpayer said the wife had told him and their son that they could live at the property for as long as they wished. Alternatively, it was argued that because his son was entitled at a fixed or ascertainable future time to ownership of a one quarter share of the home, the property was exempt to the extent of a one quarter share.
The Tribunal agreed with the Commissioner that the taxpayer and his son did not have a “right under” the will to use the property as a place of residence and therefore the relevant exemption did not apply. Instead, the Tribunal considered that the use of the property by the taxpayer and his son as their residence was as a result of an exercise of a power by the executor in accordance with the spoken wishes of his late wife. The will itself made no provision for the occupation of the property by the taxpayer and his son as a place of residence. The Tribunal also disagreed with the taxpayer’s argument that his son was entitled under the will at a future date to ownership of a share of the property. In this regard, the Tribunal noted that under the will, the taxpayer’s son was entitled immediately to a conveyance of the property, not at some future date. Accordingly, the Commissioner’s decision was affirmed.
(Caratti and Comr of State Revenue [2016] WASAT 85, WA State Administrative Tribunal, Sharp DP, 20 July 2016.)
[LTN 141, 25/7/16]
Extract from Tribunal decision
65 For the properties to be exempt from land tax for the Assessment Years under s22 of the Land Tax Assessment Act 2002 (WA), I must be satisfied that both at midnight on 30 June 2013 and at midnight on 30 June 2014:
22 Residence owned by executor etc., exemption for if beneficiary in will exercising right to reside
Private residential property is exempt for an assessment year if, at midnight on 30 June in the previous financial year —
(a) the properties were owned by the applicant as an executor of the Will as trustee;
(b) an individual identified in the Will;
(i) is entitled under the Will to the properties as a tenant for life; or
(ii) has a right under the Will to use the properties as a place of residence –
(A) for as long as he or she wishes; or
(B) for a fixed or ascertainable period,
whether or not the individual is or may become entitled under the will to ownership of all or part of the properties at some future time; and
(c) the individual uses the properties as his or her primary residence.