Chew v Chief Commissioner of State Revenue

Texts Cited: Nil

Category: Principal judgment

Parties: Megan Chien Yaw Chew (Applicant)
Chief Commissioner of State Revenue (Respondent)

Representation: Counsel:
Applicant (Self represented)
C Marshall (Respondent)
Solicitors:
Crown Solicitor (Respondent)

File Number(s): 2026/00019065

Publication restriction: None

REASONS FOR DECISION

1. These proceedings arise out of a dispute between the applicant, Ms Megan Chien Yaw Chew (“Applicant”) and the Chief Commissioner of State Revenue (“Respondent”). The dispute was about whether or not the Applicant was entitled to an exemption from duty applying to first home buyers.

Background

2. On 27 November 2020, the Applicant entered into a contract to purchase a residential strata unit. I will refer to this property as the “residential unit”. The consideration was $800,000.

3. The contract completed on 23 February 2021.

4. The Applicant claimed exemption from duty under s 78AA(2) of the Duties Act 1997 (NSW) (“Duties Act”). This is an exemption available to first home buyers in certain cases. Duty was initially assessed applying the exemption.

5. Following an audit, the Respondent assessed duty, interest and penalty tax shown in a notice of assessment issued on 19 August 2025 for $51,466.74.

6. The Applicant paid an amount of $51,734.97 on 22 September 2025.

7. On 16 October 2025, the Applicant objected to the Respondent’s assessment of 19 August 2025.

8. The Respondent disallowed the Applicant’s objection on 20 November 2025.

9. The Applicant sought review of the Respondent’s decision to assess duty, penalty tax and interest by administrative review application dated 15 January 2026. This is the application before the Tribunal in these proceedings.

Applicant’s right of review

10. Where duty has been assessed, s 86 of the Taxation Administration Act 1996 (NSW) (“Administration Act”), allows rights of objection to a taxpayer dissatisfied with an assessment. This is an internal review process under which the Chief Commissioner of State Revenue, the Respondent in these proceedings, must consider and determine the objection (s 91 of the Administration Act).

11. A taxpayer who is dissatisfied with the decision made upon the Respondent’s determination of an objection, may apply to the Tribunal for an administrative review under the Administrative Decisions Review Act 1997 (“NSW”) (“ADR Act”) of the decision of the Chief Commissioner of State Revenue the subject of objection.

12. These circumstances have arisen in the present matter as set out in the background above, so bringing the matter within the jurisdiction of the Tribunal.

13. The onus of proving her case lies with the Applicant (s 100(3) of the Administration Act).

14. The Tribunal, dealing with the taxpayer’s application, may do one or more of the following under s 101 of the Administration Act:

“(a) confirm or revoke the assessment or other decision to which the application relates,

(b) make an assessment or other decision in place of the assessment or other decision to which the application relates,

(c) make an order for payment to the Chief Commissioner of any amount of tax that is assessed as being payable but has not been paid,

(d) remit the matter to the Chief Commissioner for determination in accordance with its finding or decision,

(e) make any further order as to costs or otherwise as it thinks fit.”

Consideration

15. The Duties Act charges duty on certain transactions, described by that act as “dutiable transactions”. They include transfers of dutiable property and agreements for the sale or transfer of dutiable property (s 8(1)(a) and (b)). “Dutiable property” includes land in NSW (s 11(1)(a)). Where an agreement for the sale or transfer of land in NSW is executed, that agreement bears ad valorem duty. Any transfer made in conformity with the agreement is subject to a fixed duty if the duty chargeable in respect of the agreement has been paid (s 18(2)).

16. Duty is payable within 3 months of the liability arising. If it is not so paid, a tax default arises (s 17).

17. The Duties Act, however, allows concessions and exemptions from duty for certain dutiable transactions. The exemptions include an exemption that benefits first home buyers. The terms of that exemption are set out in Part 8 of Chapter 2 of the Duties Act. The scheme was, at the relevant time, expressed to be “intended to help people who are acquiring their first home” (s 69).

18. There is no dispute that the agreement for sale or transfer of the residential unit the subject of these proceedings was dutiable as a “dutiable transaction” absent exemption. The question for determination in this matter is whether or not the exemption allowed under Part 8 benefiting first home buyers applied to that agreement, so relieving the Applicant from the liability for duty that would otherwise apply.

19. Qualifying for exemption requires satisfaction of a number of requirements. One of the requirements is known as the “residence requirement” set out in s 76 of the Duties Act. The dispute between the parties is about whether or not the “residence requirement” was satisfied.

20. For the “residence requirement” to be satisfied, the Applicant must have occupied the residential unit as her “principal place of residence” for a continuous period of at least 6 months, commencing within 12 months of the completion of the agreement for the sale or transfer of the residential unit. Section 76 was subsequently amended to lengthen the required continuous period of residence to 12 months. However, at the relevant time, the required continuous period of residence was 6 months.

21. The issues before the Tribunal for consideration are the following;

22. Did the Applicant occupy the residential unit as her “principal place of residence” for a continuous period of at least 6 months commencing within 12 months of the completion of the agreement for the sale or transfer of the residential unit?

23. If she did not satisfy the requirements for exemption, whether the Applicant was liable to penalty tax. If so, a further question is whether the penalty tax should be remitted in whole or in part?

24. Whether the interest assessed should be remitted in whole or in part?

Occupation of residential unit

22. The first issue for determination is whether or not the Applicant occupied the residential unit as her “principal place of residence” for the time required under s 76 of the Duties Act as it stood at the relevant time. The provision as it applied at that time said:

“(1) The home must be occupied by the first home owner or one of the first home owners who is acquiring it as a principal place of residence for a continuous period of at least 6 months, with that occupation starting within 12 months (or such longer period as the Chief Commissioner may approve) after completion of the agreement or transfer. This requirement is referred to as the residence requirement.

(2) The Chief Commissioner may, if satisfied there are good reasons to do so in a particular case:

(a) modify the residence requirement by approving a shorter period of occupation by a first homeowner, or

(b) exempt a first homeowner from the requirement to comply with the residence requirement”.

23. There are two relevant requirements that need to be satisfied under s 76. The first goes to the nature of the occupancy of the property in question. That occupancy must answer the description of the first home buyer’s “principal place of residence”.

24. Secondly, there is a temporal requirement. That requirement is for that occupancy to run for the prescribed period. The temporal requirement in turn has two elements. First of all, the occupancy must have been for a continuous period of at least 6 months under the provision as it stood at the relevant time. Secondly, that six-month period must commence within 12 months of the date of completion. Section 76 as it now stands requires that the period of occupancy be for a continuous period of at least 12 months.

25. The first question is whether the residential unit during the required period answered the description of the Applicant's “principal place of residence”. The Duties Act does not provide a definition of “principal place of residence”. However, the case law contains guidance on what is a principal place of residence. That term takes its ordinary meaning in the context in which it appears (Black v Chief Commissioner of State Revenue [2011] NSWADT 66, at [82]).

26. The cases generally consider the meaning of “principal place of residence” as a whole phrase. There, however, are two relevant elements contained within the phrase. The first is that of “residence”. The second is that the relevant property must be the “principal” place of residence.

27. Consideration of whether a person has been residing in or occupying premises as their principal place of residence is to be assessed objectively, in the light of circumstances relating to the occupation of the premises. The intention of the person concerned is relevant. However, it needs to be gauged objectively but is not determinative of the issue (Tobin v Chief Commissioner of State Revenue [2009] NSWADT 188, at [45]).

28. In Black, the Administrative Decisions Tribunal, applying the decision in C**hief Commissioner of State Revenue v Ferrington [2004] NSWADTAP 41, described at [82] what a principal place of residence is. The Administrative Decisions Tribunal said:

“….. consideration of whether a person has been residing or occupying premises as their principal place of residence is to be assessed objectively, in the light of the circumstances relating to the actual occupation of the dwelling ...

…. the intention of the person concerned, gauged objectively, is relevant but not determinative of the issue ...

…. to occupy a home as his or her principal place of residence a person's occupation must have a degree of permanence to it: a connection to a place of residence of a transient, temporary, contingent or passing nature is not sufficient, nor is occupation for some other purpose ...

…. the short length of a person's residence, while relevant, is not determinative of the issue. ... This is so since a recipient's occupation of a home, while short, may have the requisite degree of permanence to it. But that will not happen if, when considered objectively, the occupation was transient, temporary, contingent or of a passing nature, or for some other purpose. One may occupy premises for a short time on a transient, temporary, or contingent basis, but one can also occupy for a short time as one's principal place of residence. It is the nature of that occupation which provides the element of permanence. The fact that a period of actual occupation is short, as in the present case, will in practice make it harder for a recipient to show that the occupation was as his or her principal place of residence, but it will not make it impossible ....

…. the reasons for a person's departure from the home must be both reasonable and adequately explained when considered objectively in the light of their personal circumstances ... In Bates the Tribunal said that "whether the reasons for not residing at the property were as a result of matters entirely out of the control of the applicant" was a factor to be considered. While that is undoubtedly correct, it should not be read as stipulating a requirement that the reasons for departure must be entirely out of that person's control. The facts in Gaines illustrate that there are circumstances, peculiar to the individual concerned, which may, objectively viewed, adequately and reasonably explain a person's decision to move out of a property, but which are not entirely out of the person's control”.

29. The Administrative Decisions Tribunal then summarised the following factors going to the determination of whether premises were someone’s principal place of residence, at [84]:

“a. the amount of time that the residence is occupied and the pattern of occupation (McIlroy (supra) at [46]-[47]);

b. the listing of the address of the person, for official purposes such as on a licence or on an electoral roll (although it is noted by the Tribunal that these are not necessarily conclusive evidence that the address is the principal place of residence) (Chief Commissioner of State Revenue v Mesiti [2003] NSWADTAP at [50], McIlroy (supra) at [47].)

c. respective rights in respect of the two properties (Mesiti (supra) at [61]).

d. relative location of clothing, furniture and possessions (Mesiti (supra) at [61]; Yen-Cheng Chuang v Chief Commissioner of State Revenue [2009] NSWADT 160 at [21]).

e. where family members reside (Mesiti (supra) at [61], McIlroy (supra) at [46]).

f. the strength of ties and connection with the residence (Mesiti (supra) at [61], McIlroy (supra) at [46]).

g. utilities usage (Tobin v Chief Commissioner of State Revenue [2009] NSWADT 188 at [49], Yen Cheng (supra) at [21].

h. the address to which bills are sent (Tobin (supra) at [48]).

i. the nature of insurance held for each property (Tobin (supra) at [18]).

j. where the person eats, drinks and sleeps (Yen-Cheng (supra) at [19]-[21]).

k. where a person entertains friends (Yen Cheng (supra) at [21])”.

30. The Applicant needs to establish on the balance of probabilities the facts necessary to show that she occupied the residential unit as her principal place of residence for a continuous period of 6 months. That occupation must have started within 12 months after 23 February 2021, the date of completion of the agreement for sale or transfer of the residential unit.

31. The Applicant’s case is that she commenced occupation of the residential unit as her principal place of residence from 26 February 2021 when she says she had moved into the residential unit. This is a time which falls within the period of 12 months commencing on 23 February 2021.

32. The Applicant says that she occupied the residential unit as her principal place of residence for a continuous period of up to at least 6 months commencing on 26 February 2021 and therefore satisfies the “residence requirement” set out in s 76. Whether or not this was the case is a matter for determination by the Tribunal on the evidence before it.

33. The matters of fact relevant to when the Applicant commenced residing at the residential unit and how long she resided there were as follows.

34. The Applicant had been residing at her parent’s residence before February 2021.

35. Removalists delivered furniture to the residential unit on 26 February 2021.

36. The Applicant, her brother and partner were assembling furniture at the residential unit on 27 February 2021.

37. The Applicant’s cousin visited the residential unit on 28 February 2021.

38. Electricity was connected to the residential unit in February 2021 in the name of the Applicant.

39. On 13 March 2021, the Applicant said in a text message that she and her partner were going to “continue moving and getting things ready” at the residential unit.

40. The residential unit obtained an internet connection by 23 March 2021.

41. From 26 June 2021, the Applicant stayed at her parent’s home. She said she did so “temporarily” and had moved there “during the COVID-19 lockdowns”.

42. Energy usage at the residential unit fell in July and August 2021.

43. There was no water usage from 12 June 2021 to 30 June 2021.

44. On 20 August 2021, the Applicant said in an email that she “made the decision to move out of” the residential unit. She asked for removalists to attend on 28 August 2021.

45. Records held by the Australian Taxation Office indicate that the residential unit was available for rent from 19 August 2021. The Applicant said that the date was recorded in error.

46. Rent was earned from the residential property from October 2021.

47. On 12 February 2022, the Applicant and a friend began renting a different property. The Applicant began living there from that time.

48. The Applicant had not returned to live in the residential unit as at the time of hearing of these proceedings.

49. The Applicant’s brother gave evidence that he lived at the residential unit from 26 February 2021 to 31 August 2021and “regularly stayed” there during the period.

50. During the relevant six-month period, the Applicant continued to use her parent’s home as her “current residential address” provided to the Australian Taxation Office. It was also the address that was on her driver’s licence, provided to her bank and provided when she visited hospital in May 2021.

51. The Applicant’s father on 22 April 2021 said to her that “she might want to start checking your ….. mailbox. Probably a few letters in there”.

52. The Applicant said that her partner and her intended to occupy the residential unit as their “long-term home when financially viable”.

53. I am satisfied that the evidence establishes that the Applicant began residing in the residential unit in late February 2021 and did so no earlier than 26 February 2021. I am also satisfied that she did so on the basis that the residential unit was her principal place of residence. I rely on the evidence as to furniture being moved to the residential unit in late February 2021 and the assembly of that furniture. I also rely on an internet connection being established in March 2021 and the connection of electricity in February 2021.

54. I do not think that the “residence requirement” requires that the full complement of goods and amenities usually found in an established residence, have to be in place at the time a first home buyer commences residence at their new home. The acquisition of these things can take time (see Pascuzzo v Chief Commissioner of State Revenue [2025] NSWCATAD 49, at [73]). In these circumstances, the absence of an internet connection at the time occupation commenced does not prevent me from finding that the Applicant commenced occupation of the residential unit as her principal place of residence no earlier than 26 February 2021.

55. That the Applicant’s parent’s address remained the address she used for taxation purposes and on her driver’s, licence is not determinative of the question of what her principal place of residence was. This was where she had been living before she moved into the residential unit. I am of the opinion that the matters set out at [37] above carry greater weight in determining where the Applicant’s principal place of residence was, at the end of February 2021.

56. It was not contested that the Applicant had ceased living at the residential unit in June 2021. At that time, she returned to the residence of her parents. She said that she did so on account of the care she needed to manage certain medical conditions. She also said that the period she lived with her parents included a time of lockdown mandated to contain the COVID-19 pandemic. She said that the high level of fear and concern that was prevalent at the time caused her to live with her parents for the relevant period.

57. The restrictions imposed as a result of the lockdown for COVID-19 allowed movement for a number of reasons, including obtaining medical care and compassionate reasons. The Respondent’s submission was that the Applicant could continue to live at the residential unit during the relevant period of lockdown and leave the residential unit to obtain the care she needed.

58. The evidence does not establish that the only course open to the Applicant was to live with her parents to receive the level of care she needed. It was, in theory, possible for her to remain at the residential unit and make arrangements to receive the care she needed at that location. She also travelled to work during the period of residence with her parents and was not confined to her parent’s home. The Applicant at the hearing of the matter accepted that she was not legally required to remain at her parent’s home during the period of lockdown.

59. However, I accept the Applicant’s evidence that she moved to her parent’s house because she believed that living there allowed for better conditions for her to receive the care she needed. I do not think that the circumstances of the Applicant’s move to her parents’ house prevent the continuing characterisation of the residential unit as her principal place of residence, at the time she left it. I am satisfied that she did not return to her parent’s house to live there as her principal place of residence but to obtain the kind of care she wanted for a period. She did not remain there indefinitely but moved into a different property in February 2022.

60. I do not think that the circumstances allow the characterisation of the period of residence at the residential unit as one that was transient, temporary, contingent or of a passing nature. The Applicant has provided reasons for her departure from her home that are both reasonable and adequately explained. The residential unit, in my opinion, remained the Applicant’s principal place of residence at the time she left it, even though she had not been living at the residential unit for a long time. A short length of a person's residence, while relevant, is not determinative of the issue (see [28] above).

61. The events occurring in August 2021, however, also bear relevance in determining whether or not the Applicant satisfies the “residence requirement”. It is not sufficient that a taxpayer commences occupation of their principal place of residence within 12 months of completion. The claimed principal place of residence must have been occupied by the Applicant for a continuous period of at least 6 months after residence commenced. Commencement of residence having occurred on 26 February 2021 at the earliest, the required period of continuous occupation in the present case, must end no earlier than the 25 August 2021.

62. Evidence found in the Applicant’s correspondence demonstrated that she had decided not to live at the residential unit at a certain point in time. An email she had written shows that she had made that decision no earlier than 20 August 2021 ([33](11) above).

63. There was also evidence that by 19 August 2021, the Applicant had decided to rent the residential unit. Information provided to the ATO was that the property was available to rent from 19 August 2021. The Applicant said that this was erroneous information. However, rental income was earned from October 2021.

64. I do not think, in these circumstances, that the Applicant has shown that she continuously occupied the residential unit as her principal place of residence for the required six-month period. This is because within that six-month period, she had decided not to live in the residential unit and also taken steps to leave the property. These steps included arranging for a removalist to move her belongings out of the residential unit.

65. The residential unit was occupied by a tenant in October 2021. I infer from that occupation that at the time on or before 20 August 2021 when she decided to leave the residential unit, she had also decided to use it to earn rent.

66. The Applicant said that merely making a decision to stop living at a place does not prevent the place from ceasing to be a person’s principal place of residence. I am in agreement with this submission. However, in the present case, there was more than simply a decision to stop living at the residential unit. Steps had been taken to leave the property and use it to earn rent. Additionally, the Applicant had been physically absent from the residential unit for about two months. These circumstances are sufficient to allow me to find that the continuous occupation of the residential unit as the Applicant’s principal place of residence had ceased before 25 August 2021.

67. A period of physical absence from a property does not necessarily prevent a taxpayer from claiming the property as their principal place of residence during the required period of continuous occupation. However, within the relevant six-month period, the taxpayer had been physically absent from the residential unit (since 26 June 2021) and during that period of absence took actions to leave the residential unit and to use it for a purpose other than as her own residence, namely, to rent the property. These circumstances in my opinion, prevent the Applicant from maintaining her claim that she had occupied the residential unit as her principal place of residence for the required continuous 6-month period.

68. As a consequence, the Applicant has not satisfied the “residence requirement” and does not obtain exemption from duty under Part 8 of the Duties Act. Even if the Applicant had come close to satisfying the relevant 6-month period of continuous residence, there is no provision in the Duties Act that allows exemption for a taxpayer who nearly satisfies the requirement but falls short, subject to consideration of the discretion allowed under is 76(2). I will go on to consider whether that discretion should be exercised.

Discretion

53. There is a discretion under s 76(2) to modify the “residence requirement” by approving a shorter period of occupation by the Applicant or exempting the Applicant from the requirement to comply with the residence requirement.

54. The circumstances in which the relevant discretion should be exercised fell for consideration in Sobhani v Chief Commissioner of State Revenue [2009] NSWADT 198. The Administrative Decisions Tribunal said, at [53];

“The discretion is intended to allow the grant to be retained under the FHOG Act and the FHP Concession to apply under the Duties Act in circumstances where the applicant had a real bona fide intention to occupy and use the home as his or her principal place of residence, but failed to do so due to a change in circumstances after the purchase of the home. Generally speaking, an acceptable circumstance would be one outside the control of the applicant. Without placing any limitation, the circumstances would include the need for an applicant to move interstate or overseas to carry out work duties, the serious illness of an applicant after exchange of contracts preventing occupation and use of the property, or a financial difficulty, for example loss of the income-earning job, after purchase of the property”.

55. The question was also considered in Deverich v Chief Commissioner of State Revenue [2010] NSWADT 268. The Administrative Decisions Tribunal said, at [48]:

“I think the discretion should be considered in cases where there is a bona fide attempt by an applicant to establish his or her first home and some impediment beyond the control of the applicant prevents the occupation of the property for a continuous period of six months. The discretion can be exercised at any time. But the Tribunal is entitled to consider the actual use and occupation of the property during the period of ownership. In this matter, the applicant was aware at the time he made the application for the grant that he would not, because of the nature of his employment, satisfy the required residence test. He has never occupied the property as his principal place of residence. It has been and remains let. The only inference that can be made is that he purchased the grant property as an investment property to earn rental income and acquire real estate”.

56. The circumstances in which discretion should be exercised under s 76(2) recently fell for consideration in Williamson v Chief Commissioner of State Revenue [2025] NSWCATAD 69. This was a case where the taxpayer had to move out of her property and live with her parents because of remote work requirements and COVID 19 lockdowns.

57. Sullivan SM said:

“I do not agree with the Respondent’s submission that the discretion can only be exercised in circumstances beyond the control of the taxpayer. That may generally be the case. But, for example, making a decision to leave a home due to actual or threatened domestic violence arguably involves a voluntary choice whether to stay or to leave, and also choosing when to do so; but there is nonetheless a compulsion. And it would require the adducing of evidence sufficient to establish that compulsion to leave. Submissions as to what may have been intended, or occurred, are not evidence. The absence of a proper statement or oral testimony from the Applicant makes the Tribunal’s task more difficult.

I am aware the COVID-19 pandemic was unprecedented, and that it caused great uncertainty, and impacted upon the Applicant.

But I cannot be satisfied that:

(1) the Applicant commenced occupation of the Property as her principal place of residence in January 2020 (nor any particular date in that month);

(2) she was compelled to move out – either due to her mental state, or because she was unable to work from the Property due to the absence or unreliability of an internet connection, a matter that could only be remedied by moving to her parents’ house who did have an internet connection;

(3) she was therefore unable to comply with the 6 month “continuous occupation” residence requirement, arising by a circumstance that was unforeseen at the time of her purchase of the Property; or

(4) she moved back in as soon as the circumstances enabled reoccupation to commence, using an internet solution that was unavailable in March 2020.

As noted in Simpson v Chief Commissioner of State Revenue [2009] NSWADT 55 at [70]:

“In my view, the positive exercise of a discretion in such a case (where there is nothing more than a decision/choice made by an applicant) would defeat the object of the legislature in having a residence requirement (to be met within a certain timeframe) in the first place.”

58. I accept that the exercise of discretion can occur where the reason for having to leave premises is not a circumstance outside the control of an applicant, for the reasons given by Sullivan SM. I accept that a need to live elsewhere to receive care even if there is no necessary compulsion to do so, may allow the exercise of the discretion under s 76(2).

59. However, where the Applicant never returned to the residential unit, having taken steps to leave it and rent the premises during the relevant 6-month period, I do not think discretion can be exercised. This is because within the 6-month period, the Applicant took steps to change the use of the residential apartment from one of being her principal place of residence to an investment property from which she earned a rental income.

60. Having rented the residential unit, the Applicant did not return to live there but began to live in a different rental property. Even though she says that she intends to return to the residential unit and live there at a future date, she had not done so as at the time of hearing. More than four years have passed since the residential property became an investment property. The decision within the relevant 6 months to use the residential property as an investment property and its subsequent rental, in my opinion, prevent the exercise of discretion.

Statutory purpose

61. The Applicant submitted that Division 1 of Part 8 of the Duties Act should be construed in accordance with the statutory purpose, namely, to help people who are acquiring their first home. I understood the Applicant to say that construing the relevant provisions to give effect to their purpose would allow her to obtain the benefit of the exemption she sought.

62. That a statute should be construed to give effect to its purpose, is well accepted. However, that purpose needs to be ascertained having regard to all of the relevant provisions. While the purpose of the division as a whole is to help people who are acquiring their first home, Division 1 also places constraints on the application of the relevant exemption. That is also a purpose to which effect must be given. For the reasons set out above, I do not think the purpose of Division 1 would be served by allowing exemption for a property that has become an investment property in the circumstances of the case.

Penalty tax

63. In circumstances where a tax liability has not been discharged within the required 3-month period referred to at [16] above, a tax default arises. The Respondent submitted that the tax default in the present matter, allowed him to assess penalty tax on the unpaid duty.

64. The Respondent’s power to assess penalty tax arises under s 26 of the Administration Act. It is imposed in addition to interest. The Administration Act expressly provides that the imposition or remission of interest is not relevant to the imposition or remission of penalty (s 33(2); see also s 25(4)).

65. The amount of penalty tax payable for a tax default is relevantly set at a default rate of 25% of the amount of tax unpaid (s 27).

66. The Respondent has the power to reduce the amount of penalty tax to 20% if, after the Respondent informs the taxpayer that an investigation relating to the taxpayer is to be carried out and before it is completed, the taxpayer discloses to the Respondent, in writing, sufficient information to enable the nature and extent of the tax default to be determined (s 29). The Respondent has not reduced the rate of penalty tax to 20%.

67. The Respondent may go further and determine that no penalty tax is payable in respect of a tax default, if satisfied that the taxpayer or a person acting on behalf of the taxpayer, took “reasonable care” to comply with the taxation law (s 27(3)). The Respondent did not use this power to remit penalty tax in its entirety.

68. Section 33 of the Administration Act allows the Respondent a power to remit penalty tax in addition to that allowed under s 27. He may “in such circumstances as the Chief Commissioner considers appropriate, remit penalty tax by any amount”. The Court of Appeal in Chief Commissioner of State Revenue v Downer EDI Engineer Pty Ltd (2020) 103 NSWLR 772; [2020] NSWCA 126 considered that the power of remission under s 33 was not limited either expressly or by necessary implication by the mandatory reductions required by ss 28 and 29 of the Administration Act. Bathurst CJ said:

“ …. it does not seem to me that the power in s 33 of the TAA to remit penalty tax “in such circumstances as the Chief Commissioner considers appropriate” is limited either expressly or by necessary implication by the mandatory reductions required by ss 28 and 29. These mandatory reductions are a relevant matter for the Commissioner to take into account in considering whether to exercise the power to remit in s 33 but they do not limit that power.

As the Chief Commissioner pointed out, in Bayton Cleaning Company Pty Ltd v Chief Commissioner of State Revenue Ward CJ in Eq stated at [301] that except in special circumstances, the general discretion under s 33 should not be exercised beyond the limits in ss 27(3) and 29 when the circumstances giving rise to a remission under s 27(3) of the TAA had not been made out. However, that was a matter of discretion not power”.

69. The Respondent decided not to remit penalty tax because in the Respondent’s submission, the taxpayer had not taken reasonable care. He said that there was no evidence of what, if any, professional advice the Applicant sought or information she sought from the Respondent about the residence requirement, despite having left the residential unit in June 2021 and taking steps to leave it and rent it within the relevant 6-month period.

70. Following contact with the Respondent, the Applicant did not disclose to the Respondent, in writing, sufficient information to enable the nature and extent of the tax default to be determined. The Applicant maintained that she had “just checked and I can confirm that I resided in my property for longer than 6 months in 2021”.

71. I am in agreement with the Respondent’s submissions as to why the penalty tax assessed should stand. I find nothing in the evidence to show that there are exceptional or other circumstances allowing for the remittal of penalty tax.

Interest

72. This leaves for determination the question of whether the Respondent’s assessment of interest should stand or whether the interest should be remitted. That interest was assessed by reason of s 21 of the Administration Act. Section 25 in turn allows for the remission of interest.

73. Section 25 of the Administration Act gives the Respondent a power to issue guidelines setting out how interest must be remitted. He purported to issue relevant guidelines in Ruling “TAA 001: Remission of Interest Guidelines” (“Guidelines”). The Respondent, applying the terms of the Guidelines, decided not to remit interest.

74. The Guidelines were published on 1 July 2025. Transitional rules provide as follows:

Transitional Rules

These rules take effect from the date that these Guidelines are published, regardless of the date on which the liability for tax arose, or the date on which a notice of assessment was issued by the CCSR. This means that if the following arises after the date of publication, these Guidelines must be adopted when deciding to remit interest:

An initial request9 for an interest remission is made to the CCSR; or

a payment extension or payment plan is approved by the CCSR; or

an objection is lodged under Division 1 of Part 10 of the TAA.

Any approved payment extensions or payment plans that were already in place, or any legal proceedings10 which have been commenced prior to that date, will not be affected”.

75. I am satisfied that the transitional rules apply to bring the present matter within the terms of the Guidelines, the Applicant’s objection having been made on 9 July 2025, after the publication of the Guidelines on 1 July 2025.

76. The Guidelines say:

“Circumstances under which the CCSR can remit interest

The CCSR can remit interest:

a. in accordance with the 25% Remission Criteria;

b. in Exceptional Circumstances; or

c. in accordance with an Approved Payment Extension; or

d. In accordance with an Approved Payment Plan.

The 25% Remission Criteria

The CCSR can remit up to 25% of the interest imposed where:

a. the tax default was due to Listed Circumstances where a taxpayer has made an attempt but, notwithstanding that attempt, it was still impossible to lodge or pay on time (excluding financial incapacity and/or hardship);

b. a taxpayer is required to lodge and pay by way of a monthly return and has either lodged or paid late on no more than 1 occasion within the last 24 months;

c. an assessment is issued to a New Land Tax Customer and/or an initial return is required to be lodged by a New Land Tax Customer and payment/lodgement was received within 60 days of the prescribed due date; and

d. the taxpayer has made a Voluntary Disclosure before an investigation and the Chief Commissioner is satisfied that the tax default was not within the control of the taxpayer.

For the purposes of these Guidelines Listed Circumstances are:

i. the taxpayer’s ability to administer their taxation affairs was impacted by postal or DX delays, and such delay was officially recognised by an appropriate government or regulatory body;

ii. key personnel of the taxpayer were not available for a reasonable period to execute the ordinary administration of their taxation affairs because of sudden resignation, ill health, or death;

iii. where the taxpayer did not and could not reasonably be expected to know of a liability because their affairs are managed under protective guardianship, for example by the NSW Trustee & Guardian;

iv. where industrial action impacted the ordinary administration of the taxation affairs of the taxpayer, and the taxpayer has otherwise taken reasonable care in managing their tax affairs.

For the purposes of these Guidelines, a New Land Tax Customer means:

i. an individual natural person who has been identified as having a liability for land tax, or surcharge land tax, or both, for the current year (including receiving a multi-year assessment in the current year); and

ii. who has either:

a. not previously been liable for land tax, or surcharge land tax, or both; or

b. who has previously been liable for land tax but has had at least 3 continuous tax years with no liability to land tax.

Companies, related companies, partnerships and trustees of any category of trusts are not considered to be new land tax customers.

For the purposes of these Guidelines a Voluntary Disclosure means:

1. The disclosure of information to the CCSR of a tax default by or on behalf of a particular taxpayer or taxpayers; and

ii. Containing sufficient information for the CCSR to determine the nature and extent of the tax default.

A Voluntary Disclosure does not include information relating to the late lodgement of a return required under a taxation law or the late payment of duty on a dutiable transaction under Chapter 2 & 2A of the Duties Act 1997.

Exceptional circumstances

The CCSR can remit up to 100% of the interest imposed where:

a. a default is due to financial system network and/or payment platform failure;

b. acts or omissions of Revenue NSW affected the receipt of payment, including processing problems;

c. payment is not possible due to the direct impact of fire, flood or other natural disaster;

d. the CCSR has made a declaration on the Revenue NSW website as to how interest will apply to particular persons or classes of persons for a specified period of time under any circumstances that the CCSR considers appropriate”.

77. The evidence does not disclose any matter that falls within the description of a “Listed Circumstance” or an “Exceptional Circumstance”. Consequently, the Guidelines do not allow the remission of interest in any amount.

78. A question as to whether or not the Guidelines were valid arose in the matter of Wang v Chief Commissioner of State Revenue [2026] NSWCATAD 178. The circumstances in which that question has arisen are set out in Wang, at [79]-[84].

79. The Respondent submitted that the Guidelines remained in force pending any determination as to questions of validity by a decision maker exercising the necessary jurisdiction to make such a determination.

80. Following such time as the question of validity of the Guidelines is determined and if that determination is that the Guidelines cannot stand in whole or part, the Respondent should consider anew whether he should remit interest and make any necessary reassessment. Consideration of matters going to the remittal of interest will need to be made having regard to the statutory scheme as a whole described at Wang, at [36] - [44] and any determination of the validity question.

Orders

1. The assessment under review is confirmed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar