Four couples (the taxpayers) have been successful before the WA State Administrative Tribunal in a matter concerning a private residence construction land tax exemption.

In July 2008, 4 couples purchased a property (Lot 29) intending to develop 4 new apartments. In October 2011, a partial exemption under s24A of the Land Tax Assessment Act 2002 (WA) was granted on the condition that 2 of the couples would use Lot 29 as their primary place of residence prior to the end of 2012-13 assessment year. In March 2014, that provisional exemption was rolled forward to the 2012-13 and 2013-14 assessment years as construction of the private residences was not completed.

On 12 June 2014, occupancy permits were issued for 4 new dwellings and the relevant parties commenced occupancy on 20 and 28 June 2014. On 9 July 2014, certificates of title for the 4 lots containing the 4 new dwellings, namely, Lots 1, 2, 3 and 4 were issued and Certificate of Title for Lot 29 was cancelled.

In August 2014, the Commissioner informed the taxpayers that as Lot 29 was subdivided into 4 lots on 12 June 2014, construction of the private residences that were to form part of Lot 29 could not have been completed and occupied, and that occupation of the completed residences occurred on the resultant 4 lots instead. This meant Lot 29 did not qualify for the exemption as previously allowed for the 2012-13 and 2013-14 assessment years and that land tax was payable.

The Tribunal found that Lot 29 had not ceased to exist for the assessment on 12 June 2014 and was available to allow the taxpayers to qualify for an exemption under s 24A as of 30 June 2014. The Tribunal then set aside the Commissioner’s decision and referred the matter back to the Commissioner for assessment in accordance with the Tribunal’s reasons.

(Carter & Ors and Comr of State Revenue [2016] WASAT 56, WA State Administrative Tribunal, Spillane SM, 13 May 2016.)

[LTN 99, 25/5/16]