respondent. The assessments to land tax and surcharge land tax for the 2019 to 2023 land tax years are affirmed.
Key principles
Clause 2(2)(a) of Schedule 1A of the Land Tax Management Act 1956 (NSW) requires continuous use and occupation of the relevant land by the owner for residential purposes for a...
Clause 2(2)(b) of Schedule 1A requires the Chief Commissioner to be satisfied that the land is used and occupied as the person's principal place of residence as at the taxing...
Clause 8(1) of Schedule 1A (the six-month absence concession) requires satisfaction of both subparagraphs (a) and (b) (including physical presence in Australia for a continuous...
For surcharge land tax purposes, a non-citizen is 'ordinarily resident' in Australia at a time only if both the 200-day presence test and the 'no-limitation' test are satisfied...
Issues before the court
Whether the Greenwich property was exempt from land tax under the principal place of residence exemption (Schedule 1A cl 2) for the 2019-2023 land...
Whether the applicant satisfied the concession for absences from former residence (Schedule 1A cl 8) so as to be treated as continuing to use and...
Plain English Summary
The Tribunal held that Ms Guo was liable to land tax and surcharge land tax for 2019-2023 because she did not physically occupy her Sydney property for the required statutory periods. She failed the six-month continuous occupation requirement for the principal place exemption and the cl 8 absence concession, and she failed the 200-day presence test for ordinary residence (and the LTA s 5B residence requirement) so as to avoid surcharge land tax. Personal hardship and COVID-19 travel issues did not permit the Tribunal to override clear statutory temporal requirements. The assessments were affirmed.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
Deep Dive
1,884 words · generated 29/06/2026
What happened
Fen Guo, a Chinese-born permanent resident of Australia, owned a residential property in Greenwich, NSW which she bought in 2015 as the family home. Revenue assessed her to land tax and surcharge land tax for the 2019–2023 land tax years. The Chief Commissioner disallowed her objection and the matter proceeded to review in the NSW Civil and Administrative Tribunal. The Tribunal heard evidence (including movement records, statutory declarations and cross-examination via a Mandarin interpreter) that established Ms Guo returned to China repeatedly after migrating to Australia, spent extended periods caring for her ill mother and, from late 2019, signed a three-year lease for a serviced apartment (Room 501) in Ningbo which she occupied (and from which she gave evidence). Revenue asserted the property was not the applicant’s principal place of residence at the relevant taxing dates and that, as a non-citizen, she failed the statutory tests for being ordinarily resident in Australia and so was liable to surcharge land tax. The Tribunal found for the Respondent and affirmed the assessments (orders dated 17 October 2024).
Whether the applicant was liable to surcharge land tax because she was a 'foreign person' for the relevant taxing dates, i.e. not 'ordinarily...
Cited legislation
7 cited instruments linked from this judgment.
Key chronological facts:
2015: Purchase of Greenwich property as family home.
23 April 2018 to 26 June 2019: Extended stay in China spanning taxing date 31 December 2018.
27 November 2019: Applicant departs Australia and thereafter signs a three-year lease commencing 15 December 2019 for a serviced apartment in Ningbo; she did not return to Australia during the remaining relevant years.
2019–2023: Assessments to land tax and surcharge land tax issued and ultimately affirmed by the Tribunal.
The Tribunal’s inquiry focused on the taxing dates (31 December preceding each land tax year) and the statutory temporal requirements for exemptions: six months continuous occupation for the LTMA principal place of residence provisions and 200 days’ presence/the no-limitation test for ordinary residence under FATA and the LTA s 5B residence requirement for surcharge exemptions.
Why the court decided this way
The Tribunal applied the statutory text and precedent to the factual record and reached decisions on two linked fronts.
Principal place of residence exemption (LTMA Schedule 1A cl 2)
The LTMA sets out a textual two-limb structure: either cl 2(2)(a), continuous use and occupation for residential purposes (six months), or cl 2(2)(b), the Chief Commissioner is satisfied the land is the person’s principal place of residence (a broader evaluative discretion). The Tribunal emphasised that cl 2(2)(a) is a strict, temporal, factual requirement: if a taxpayer did not actually occupy the property continuously for six months, that limb does not apply (see Reasons). The Tribunal accepted that while intention and subjective connections to the Greenwich property existed, intent alone does not substitute for facts about occupation and permanence. The applicant’s movement records showed she never had a continuous six-month occupation of the Greenwich property in the years relevant to the taxing dates; furthermore, on the year-by-year assessment required for an annual tax, her centre of life and physical presence was in China at each taxing date in dispute. The Tribunal relied on authorities interpreting 'principal place of residence' and 'use and occupy' to require physical, sufficiently permanent occupation (the Tribunal cited Ghali and other authorities). For those reasons the LTMA principal place exemption did not apply.
Concession for absences (Schedule 1A cl 8)
Clause 8 operates as a statutory deeming/hardship concession but itself requires the person to have used and occupied the former residence for a continuous period of at least six months (cl 8(1)(a)) and not to own another principal place (cl 8(1)(b)). The Tribunal found cl 8(1)(b) satisfied but cl 8(1)(a) failed because the applicant was never in Australia for a continuous six-month period. Critically, the Tribunal stated the legislation does not permit a discretion to shorten or waive the six-month requirement; statutory text controls, even where personal hardship exists.
Surcharge land tax (LTA s 5A and s 5B)
For non-citizens the FATA defines 'foreign person' by reference to ordinary residence; FATA s 5 prescribes the two-part test for an individual to be ordinarily resident: (i) actually in Australia for 200 or more days in the prior 12 months; and (ii) no time limitation on continued presence. The LTA picks up that definition and provides a targeted principal-place exemption from surcharge tax but conditions it on actual use and occupation for a continuous 200 days in the land tax year (s 5B(2)). The applicant failed the 200-day requirement and was absent for the whole of 2020–2023. The 2023 amendment narrowed the possibility of counting physical absences and included a narrow discretion for 'brief' absences (s 5B(2B)) which did not assist because the applicant’s absence was not brief. The Tribunal therefore found the applicant was a 'foreign person' and liable for surcharge land tax.
Overall approach: the Tribunal adhered to statutory requirements and precedent holding that temporal thresholds in tax statutes are mandatory and cannot be overridden by equitable considerations of hardship (citing Federal Commissioner of Taxation v Ryan and a string of NSWCAT authorities applying the principle).
Before and after state of the law
Before: The legal framework for land tax principal place exemptions and surcharge land tax liability was established by statute and earlier authorities. Courts and tribunals have repeatedly emphasised that the exemptions are conditioned on concrete, temporal factual predicates, continuous occupation for cl 2(2)(a), deemed continuity for cl 8(1)(a) subject to its own six-month requirement, and actual 200-day presence for ordinary residence under FATA/LTA. Prior NSWCAT decisions and appellate authorities (e.g. Ghali, Leda Manorstead, Applewood) had explained that 'use and occupy' and 'principal place of residence' require an objective assessment of the nature, extent and permanence of occupation.
After: This decision reaffirms the existing line of authority that statutory temporal thresholds are mandatory: the Tribunal confirmed it will not circumvent clear temporal requirements because of pandemic-related travel restrictions, caregiving responsibilities, illness or financial hardship. It reinforces the requirement of year-by-year factual analysis for annual taxes and confirms that the s 5B(2B) discretion for brief absences (introduced for 2023) is narrowly confined and inapplicable to prolonged absences.
Practically, the decision underscores that taxpayers whose occupation is interrupted by extended overseas stays must be careful about qualifying for exemptions: mere intention to return, ownership of the residence and periodic short stays are insufficient to satisfy statutory temporal tests.
Key passages with plain-English translation
"As Ms Guo did not, as a matter of fact, meet the six-month requirement specified in cl 2(2)(a) of Sch 1A of the LTMA, this exemption does not apply." (Reasons)
Plain English: The law says you must actually live at the house for six months continuously to get the exemption, and she did not meet that factual test, so she is not exempt.
"The legislation does not provide a discretion to shorten or waive that period of time." (Reasons on cl 8)
Plain English: Even if the taxpayer has a sympathetic reason for being away, the law does not allow the Tribunal or Revenue to change the six-month rule.
"A person who is not an Australian citizen has to pass both of these tests to be classed as ordinarily resident in Australia at the relevant time." (Reasons, explaining the FATA 200-day and no-limitation tests)
Plain English: If you are not a citizen, you must be physically present in Australia for at least 200 days in the prior 12 months and not be legally limited in your ability to stay; both conditions must be met to avoid being a foreign person for surcharge tax.
"Because land tax is an annual tax, it is necessary to consider the circumstances also on a year-by-year basis."
Plain English: Each tax year is assessed separately, so whether a house is your principal residence is decided for each taxing date, not by looking only at some overall intention.
"The correct and preferable decision is to affirm the assessments issued by the Respondent."
Plain English: The Tribunal agrees with Revenue and confirms the tax assessments.
What fact patterns trigger this precedent
This decision is engaged when:
An owner of residential land claims the principal place of residence exemption but has extended, repeated or long absences from Australia around the taxing date(s), and cannot show continuous six-month occupation or the requisite permanence at the taxing date.
A non-citizen owner claims exemption from surcharge land tax but fails to satisfy the 200-day presence test or the no-limitation test, or cannot demonstrate actual 200-day continuous occupation in the land tax year for s 5B purposes.
Taxpayers relying on humanitarian grounds, pandemic travel restrictions or caregiving duties seek to rely on cl 8 or s 5B(2B) exceptions for prolonged absences; the decision will be persuasive authority that statutory time tests are mandatory and narrow any relief to the textually prescribed discretions (e.g. 'brief' absences).
In short, if the case facts show prolonged overseas residence or occupation of other premises during the relevant windows, this precedent will support denial of the exemptions.
How later courts have treated it
This decision itself reaffirms a line of NSWCAT and appellate practice cited in the reasons (for example Zhang, Sjarifudin, Chu, Lawrence, Du, Feng and Song). It sits with those decisions as a recent application of the principle that statutory temporal requirements in land tax and surcharge regimes are binding. Future NSWCAT panels and NSW courts are likely to cite this decision when presented with similar fact patterns, especially when assessing the impact of COVID-19 related absences on eligibility for exemptions. The decision will be persuasive in administrative appeals, emphasizing that courts and tribunals should apply the statute’s temporal limits strictly and cannot invoke equitable fairness to rewrite clear legislative preconditions.
Still-open questions
Boundaries of s 5B(2B) discretion: The 2023 amendment affords a discretion for 'brief physical absence' in exceptional circumstances. What constitutes 'brief' and 'exceptional' will be a live issue. This decision makes clear that prolonged absences do not qualify, but marginal cases with absences of moderate duration may require careful factual analysis and could produce divergent outcomes in different panels.
Interaction between intention and objective indicia: The decision reiterates that intention to return is relevant but not decisive. There will remain close cases where short or intermittent absences combine with strong objective indicia of residence (mailing address, utilities, personal effects, social ties). The weight to be given to these indicia in borderline factual scenarios may remain a contested area.
Treatment of dual-occupancy or family arrangements: The decision notes the hypothetical that an Australian-citizen co-owner might produce a different outcome. That raises practical advice issues about title-holding arrangements and the extent to which family circumstances can be anticipated and planned to preserve exemptions.
Administrative discretion and compassionate grounds: While courts have repeatedly held that there is no general equitable discretion to waive statutory conditions, the possibility of future legislative change or targeted administrative policy guidance remains open; taxpayers facing extraordinary compassion-based cases will continue to seek legislative or policy relief rather than judicial exception.
Practical takeaway for practitioners: focus on the precise temporal windows set in statute, ensure documentary evidence of actual physical presence and the objective indicia of residence are assembled for each taxing date, and where possible advise clients on title arrangements and on making timely declarations under s 5B where applicable.
Judgment (22 paragraphs)
[1]
REASONS FOR DECISION
Fen Guo (Ms Guo), is the applicant in these proceedings. She is a permanent resident of Australia and owns a residential property in Greenwich, NSW (the Property).
She was assessed to land tax and surcharge land tax on the Property for the 2019 to 2023 land tax years. Her objection was disallowed, and she has applied to the Tribunal for an administrative review of the assessments.
The issues are whether Ms Guo was exempt:
1. from land tax - under the principal place of residence exemption in cl 2 of Sch 1A of the Land Tax Management Act 1956 (NSW) (LTMA) and/or the concession for absences from former residence exemption in cl 8 of Sch 1A of the LTMA; and
2. from surcharge land tax - which requires her to be "ordinarily resident" in Australia at the relevant times for the purpose of s 5A of the Land Tax Act 1956 (NSW) (LTA).
[2]
Background to these proceedings
The total land tax and surcharge land tax assessed was $442,427.95. No interest or penalties were imposed.
Ms Guo's objection, dated 19 June 2023, was disallowed by the Respondent in full on 17 August 2023.
Ms Guo applied to the Tribunal for administrative review on 14 November 2023. Although filed slightly late, the Tribunal granted an extension of time on 28 March 2024.
[3]
Jurisdiction and onus of proof
The Tribunal has administrative review jurisdiction to hear and determine this application: s 96 of the Taxation Administration Act 1996 (NSW) (TA Act), s 30 of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act) and s 9 of the Administrative Decisions Review Act 1997 (NSW) (ADR Act). It is the decision to issue the assessment, not the decision on the objection, which is the subject of the review: see Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184 at [28]; Ferella v Chief Commissioner of State Revenue [2014] NSWCA 378 at [10].
The Tribunal's task is to decide what the correct and preferable decision is having regard to the material before it, including any relevant factual material and any applicable written or unwritten law: ADR Act, s 63.
The taxpayer, and not the Respondent, has the onus of proving her case: TA Act, s 100(3). That means Ms Guo must prove all matters necessary for the Tribunal to answer the statutory questions in her favour: Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25 at [36]. The standard of proof is the balance of probabilities.
The Tribunal may confirm or revoke the assessment or other decision to which the application relates or make a decision in place of the reviewable decision and make orders as to costs or otherwise as it thinks fit, s 101(1) of the TA Act.
[4]
Relevant Facts
The facts below are drawn from the documents, statutory declarations and affidavits before the Tribunal as well as the oral evidence of Ms Guo and her husband, Mr Zhou. Both were cross-examined via a Mandarin interpreter.
Ms Guo and Mr Zhou were married in 1998. They both lived and worked in China before arriving in Australia in around 2015. They are now both retired.
Ms Guo bought the Property in 2015 in her sole name. It is not in dispute, and I find, that:
1. the Property was bought to be the "family home" of Ms Guo and her husband;
2. the Property has been maintained as their family home at all relevant times;
3. Ms Guo has lived at the Property whenever she has been in Australia;
4. Mr Zhou has lived at the Property whenever he has been in Australia;
5. the Property was never rented out; and
6. neither Mr Zhou nor Ms Guo owned any other real property in the relevant years.
During the relevant years, Ms Guo had family who lived in Ningbo City, Zhiejiang Province (Ningbo): Ms Guo's mother (who was widowed in 2002) lived at 75 Xudongdai Village in Ningbo (Mother's home); Ms Guo's eldest brother (who has a disability) also lived at the Mother's home; and Ms Guo's second brother and his wife also lived in Ningbo.
Since arriving in Australia, Ms Guo has returned to China many times to see her family, particularly her mother. Ms Guo is the only daughter, and her mother misses her very much if she is not there. Her mother has been hospitalised and had various illnesses over many years.
Ms Guo's second brother and his wife were both diagnosed with cancer; although it appears they were "still well" during the majority of 2019, it progressively developed into "later stage cancer" which then made it difficult for them to assist Ms Gou in caring for her mother.
Movement records (dated 14 June 2023) show Ms Guo was in Australia for the following periods and total days:
Calendar Year Periods in Australia Total days in Australia
2015 13 May 2015 to 24 May 2015 24
23 September 2015 to 4 October 2015
21 January 2016 to 18 March 2016
2016 26 June 2016 to 5 August 2016 124
7 December 2016 to …
2017 ...6 March 2017 126
21 June 2017 to 20 August 2017
2018 22 January 2018 to 14 March 2018 86
21 March 2018 to 23 April 2018
2019 26 June 2019 to 6 September 2019 154
8 September 2019 to 27 November 2019
2020 None 0
2021 None 0
2022 None 0
2023 None 0
[5]
Accordingly, Ms Guo was in China as at 31 December 2018, 2019, 2020, 2021 and 2022.
[6]
Ms Guo's mother's illness
Ms Guo's statutory declaration said that it was necessary for her to be in China to attend to the daily needs and "continuous medical attention and care" of her mother, and that no other family members were able to provide care for her.
In cross-examination, the Respondent noted that Ms Guo was in fact in Australia when her mother was hospitalised for the following periods:
1. For 18 days in mid 2016: Ms Guo explained "At that time, it [her mother's illness] was not as serious. In 2019 I came back, because it was more serious".
2. For 12 days in April 2018: Ms Guo explained "At that time my brother was not sick. At that time my brother as well as my sister-in-law were still well; and I am also getting older and prefer not to fly there and back."
3. For 12 days in September 2019: Ms Guo explained "As I told you, they [brother and sister-in-law] were still well [at that time]"
However, later in 2019, according to Ms Guo, her mother became "seriously ill". Ms Guo travelled to China on 27 November 2019 and has not returned to Australia since that time.
[7]
Ms Guo's accommodation in China
When Ms Guo was in China, she did not stay at her Mother's house.
As set out above, Ms Guo left for China on 23 April 2018 and did not return to Australia until 26 June 2019. She next went to China for 2 days in September 2019, and then left Australia again on 27 November 2019. She did not return again during the relevant period.
While in China in 2018 and 2019 (but prior to her return to China on 27 November 2019) Ms Guo said that she stayed in "roughly three different apartments" located in an apartment complex located at Building 13, Huanle Coast Community, Zhonggong Temple Street, Yinzhou District in Ningbo (Building 13).
1. They were serviced apartments, and all furniture and amenities (linen, etc.) were included.
2. They were apartments with 1 bedroom, 1 bathroom and a kitchen.
3. The accommodation was "arranged for her by her eldest brother".
4. When she returned to Australia, Ms Guo fully vacated them, and did not leave any belongings behind.
In late 2019 Ms Guo signed a 3 year lease agreement for Room 501 in Building 13 (Room 501) with a commencement date of 15 December 2019. There was no specific evidence why this 3 year lease was signed. Ms Guo told the Tribunal that she caught COVID-19 in the "first wave", and was quite ill. Her mother was in and out of hospital, and her brother and sister-in-law become sicker, and she was the only one who could look after her mother who wanted her daughter close by. I am satisfied that she continued to stay in China to look after her mother and be close to her.
Ms Guo was still in China and gave her evidence from the hospital where she was looking after her mother.
[8]
Ms Guo's visa status
Ms Guo is not an Australian citizen. At all relevant times, she was a permanent resident, and held a sub-class 155 visa. (I note that her solicitor's affidavit dated 14 December 2023 filed in support of the extension of time request repeatedly stated that Ms Guo was an Australia citizen. That was wrong.)
It appears her husband is an Australian citizen, but he is not the owner of the Property.
[9]
The Applicant's submissions
In respect of land tax, the Applicant's submissions were that:
1. Ms Guo could not return to Australia due to the impact of COVID-19, as well as her own and her mother's health issues, and had always intended to (and did) live at the Property upon her return to Australia;
2. Ms Guo and her husband own no other properties, purchased the Property as their "monumental residence" and have resided in it as their principal place of residence;
3. Ms Guo almost met the six-month requirement for continuous use and occupation of the Property in cl 8 of Sch 1A of the LTMA, and the true intention and circumstances should be taken into account in allowing her an exemption from land tax under that provision; and
4. The imposition of tax of more than $433,000 was unduly burdensome as Ms Guo and her husband now faced substantial financial difficulties and stress.
In respect of surcharge land tax, the Applicant submitted that the provisions should not apply to her circumstances, and that the tax would be unduly burdensome.
[10]
Respondent's submissions
In summary, the Respondent submitted that the Tribunal could not be satisfied, on the evidence before it, that Ms Guo:
1. continuously used and occupied the Greenwich Property as her "principal place of residence" at the time relevant to each land tax year, nor for any continuous period of 6 months, and so she was liable to land tax as assessed; and
2. was a permanent resident who was not physically present in Australia for the required period of 200 days in each relevant calendar year, was therefore not "ordinarily resident" in Australia, and so was a "foreign person" and liable to surcharge land tax as assessed.
The Respondent also submitted that general notions of fairness or justice do not allow the adjustment of tax liabilities (Federal Commissioner of Taxation v Ryan (2000) 201 CLR 109 at 123), and in the absence of any legislative discretion, the Respondent was statutorily bound to apply the legislation equally to all taxpayers.
[11]
Land Tax
Under the LTMA, land tax is levied on the taxable value of all land in New South Wales unless it is exempt (s 7). The tax is charged on land as owned at midnight on the thirty-first day of December immediately preceding the year for which the land tax is levied (s 8). The thirty-first of December is often referred to as the "taxing date" for land tax purposes - so 31 December 2018 is the taxing date for the 2019 land tax year, 31 December 2019 is the taxing date for the 2020 land tax year and so on.
Section 10 of the LTMA is the main provision dealing with land exempted from land tax. Relevantly, s 10(1)(r) provides an exemption from tax for
land that is exempt from taxation under the principal place of residence exemption, as provided by Schedule 1A
[12]
Clause 2 of Schedule 1A
Clause 2 in Sch 1A of the LTMA sets out the relevant provisions regarding the principal place of residence exemption:
2 Principal place of residence exemption
(1) Land used and occupied by the owner as the principal place of residence of the owner of the land, and for no other purpose, is exempt from taxation under this Act, in respect of the year commencing 1 January 2005 or any succeeding year, if the land is:
(a) a parcel of residential land, or
(b) a strata lot or, subject to this Schedule, land comprised of 2 or more strata lots.
(2) Land is not used and occupied as the principal place of residence of a person unless:
(a) the land, and no other land, has been continuously used and occupied by the person for residential purposes and for no other purposes since 1 July in the year preceding the tax year in which land tax is levied, or
(b) in any other case, the Chief Commissioner is satisfied that the land is used and occupied by the person as the person's principal place of residence.
(3) If the owner of land is entitled to the exemption conferred by this Schedule, no other person is liable to be assessed for taxation under this Act in respect of the land during the period of the owner's entitlement to the exemption.
(4) The exemption conferred by this Schedule is referred to as the principal place of residence exemption.
(5) The principal place of residence exemption is subject to the restrictions set out in Part 4.
Section 3(1) of the LTMA says that the "principal place of residence" of a person is:
the one place of residence that is, among the one or more places of residence of the person within and outside Australia, the principal place of residence of the person.
[13]
Clause 8 of Schedule 1A - Absences from former residence
Clause 8 of Sch 1A of the LTMA is titled "Concession for absences from former residence" and allows for a deemed satisfaction of the "use and occupation" requirement in cl 2. The relevant provision is cl 8(1) which provides:
(1) A person is taken, for the purpose of the principal place of residence exemption [in cl 2 of Sch 1A], to continue to use and occupy land formerly used and occupied by the person as a principal place of residence (a former residence) after the person ceases to so use and occupy the former residence, if the Chief Commissioner is satisfied that -
(a) the person used and occupied the former residence as a principal place of residence for a continuous period of at least 6 months, and
(b) the person does not own any other land used and occupied by the person as a principal place of residence.
[14]
Does the exemption in cl 2(2)(a) of Sch 1A apply?
The land was a parcel of residential land as required by cl 2(1) of Sch 1A.
Clause 2(2)(a) of Sch 1A of the LTMA, when read with cl 2(1), requires that the Property (and no other property) be continuously used and occupied by the owner of the property for residential purposes and no other purposes for a six month period.
However, based on the movement records summarised in the table at para 18 above:
1. Ms Guo was present in Australia for only 86 days in the 2018 calendar year, and 154 days in the 2019 calendar year;
2. Ms Guo was not present Australia at all in the 2020 to 2022 calendar years; and
3. Ms Guo has never lived at the property for a continuous period of 6 months.
As Ms Guo did not, as a matter of fact, meet the six-month requirement specified in cl 2(2)(a) of Sch 1A of the LTMA, this exemption does not apply.
[15]
Does the exemption in cl 2(2)(b) apply?
The exemption in cl 2(2)(b) of Sch 1A LTMA is not engaged unless the Property is used and occupied as Ms Guo's principal place of residence: Applewood Residential Developments Pty Ltd v Commissioner of State Revenue (Vic) [2006] VSCA 207 at [17] and [26]. I agree with the submissions of the Respondent that use of the Property for residential purposes is not sufficient as cl 2(2)(b) eschews reference to residential purposes and therefore differs from cl 2(2)(a).
Ms Guo must therefore demonstrate that she used and occupied the property as her principal place of residence as at each relevant taxing date of 31 December in 2018, 2019, 2020, 2021 and 2022.
The LTMA does not define "principal place of residence". However, the matter has been well considered in previous cases such as Yen-Cheng Chuan v Chief Commissioner of State Revenue [2009] NSWADT 160 and Chief Commissioner of State Revenue v Ferrington [2004] NSWADTAP 41, and cases referred to in those decisions.
In summary a place of residence is the place where a person eat, drinks and sleeps. It may, but need not, be owned by the taxpayer.
The phrase "use and occupy" referred to in s 5B(2) is a compound phrase; it refers to physical use and occupation: Ghali v Chief Commissioner of State Revenue [2013] NSWCA 340 at [45]. But it is more than that: it is physical use and occupation of the land as the owner's principal place of residence, and requires something approaching regular enjoyment. As principal means "main", it is therefore necessary for Ms Guo to show that her use and occupation of the Property had a degree of permanence to it; a connection to a place of residence of a transient, temporary, contingent or passing nature is not sufficient.
The duration of a person's residence is relevant but not determinative. One may use and 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 will in practice make it harder for a recipient to show that the occupation was as the person's principal place of residence, but it will not make it impossible. Objective considerations include both the extent and quality of the use and occupation of each place of residence. The intention of the person concerned, gauged objectively, is therefore relevant but not determinative of the issue. As noted in Re Ziino and Commissioner of State Revenue [2004] VCAT 1707, although considering the phrase "permanent place of residence" (rather than "principal place of residence"), the Victorian Civil and Administrative Tribunal stated at [10]:
The test of a "permanent place of residence" is an objective rather than a subjective test…. In my view, while sleeping by itself in a place can be an indication of a principal place of residence, it is not the sole matter to be taken into account. One needs to look at a whole indicia of matters … One needs to look as well at where the applicant ate; his use of electricity and the furniture and fittings and other matters such as entertainment of friends in the house …. Sleeping in a place does not make a residence. It has got to be the whole indicia of things that are done in a home which are described in the cases …
[16]
Was the Property Ms Guo's principal place of residence?
Because land tax is an annual tax, it is necessary to consider the circumstances also on a year-by-year basis. So it requires her to prove that the Property was her principal place of residence as at 31 December prior to each relevant land tax year.
As stated in Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue (2010) 79 NSWLR 724 (per Gzell J at 726), in determining the liability of a property to land tax for a particular land tax year:
…. Inquiry is not limited to the use to which land is put on the relevant date [31 December preceding the land tax year]. It extends to a consideration of its use during a reasonable period preceding and following the relevant date ….. In my view, six months before and after the relevant date is a reasonable period for enquiry in this case …
I accept the Respondent's submission that, in each of the relevant years, Ms Guo either spent the majority, or all, of her time living in China.
More particularly:
1. For the 2019 land tax year, I find that the Property was not Ms Guo's principal place of residence. Rather, she was present in China for an extended period from 23 April 2018 to 26 June 2019 (see para 24 above), staying in one or more apartments in Building 13. That period spanned 31 December 2018. I find that her stay in China was neither "transient" nor "temporary", notwithstanding that she intended to, and did in fact, return to Australia during the 2019 calendar year.
2. On and from 15 December 2019, Ms Guo lived at Room 501 in Building 13 under the terms of the 3 year lease. There is no evidence that she returned to Australia during any of the succeeding calendar years. Accordingly, I also find that the Property was not her principal place of residence as at midnight on 31 December 2019, 2020, 2021 and 2022.
In arriving at this conclusion I have had regard to the following matters:
1. For the purposes of the principal place of residence exemption, it is irrelevant that Ms Guo did not own the properties in Ningbo where she resided.
2. I accept that Ms Guo regarded Greenwich, only, as her family home: firstly, because she and her husband had migrated to Australia to live; secondly, because she didn't own another house; thirdly, because it was where she and her husband lived whenever they were in Australia; fourthly, it was where her husband continued to live when she was visiting her mother in China; and fifthly, that she intended to return there as soon as circumstances permitted. However, an intention to return does not establish that the Property was her principal place of residence as a matter of fact.
3. I also accept that her mother was ill, that Ms Guo caught COVID-19, and that she was unable to return to Australia for some time.
4. However, even as those circumstances of the pandemic passed, she remained overseas.
[17]
Clause 8 of Sch 1A of the LTMA - Absence from principal place of residence
The requirements of cl 8 of Sch 1A have not been satisfied:
1. Reaching a state of "satisfaction" requires a finding of fact on the two requirements in cl 8(1)(a) and (b) of Sch 1A;
2. There is no dispute that cl 8(1)(b) is satisfied.
3. However, Ms Guo was never in Australia for a continuous period of six months. I therefore cannot be satisfied that the "6 months" requirement in cl 8(1)(a) was met, because the legislation does not provide a discretion to shorten or waive that period of time;
4. Any reason for the shortfall in days is not relevant. That is the result, even if I were to accept that it was unfair, explainable, or caused by circumstances that were partly or wholly outside the person's control.
Accordingly, the assessments to land tax for each of the land tax years 2019 to 2023 are correct.
[18]
Relevant legislation
From the 2017 land tax year onwards, surcharge land tax is payable under s 5A(1) of the LTA in respect of residential land owned by a foreign person. Surcharge land tax is payable in addition to any land tax payable on the same land, and is payable even if no land tax is payable on that land: LTA, s 5A(3). Again, the "taxing date" for surcharge land tax for a land tax year is 31 December in the previous year.
For the purposes of the LTA, the expression "foreign person"' has the same meaning as in Chapter 2A of the Duties Act 1997 (NSW) (Duties Act): LTA, s 2A.
Chapter 2A of the Duties Act contains s 104J(1), where "foreign person" is defined to mean "a person who is a foreign person within the meaning of the Foreign Acquisitions and Takeovers Act 1975 (Cth) of the Commonwealth (FATA), as modified by this section". The modifications referred to in the FATA do not apply because Ms Guo has never been an Australian citizen or a New Zealand citizen.
In the FATA, a "foreign person" is an individual who is not ordinarily resident in Australia: s 4.
Relevantly, s 5 of the FATA provides that an individual who is not an Australian citizen is ordinarily resident in Australia at a particular time if and only if (my emphasis):
(i) the individual has actually been in Australia during 200 or more days in the period of 12 months immediately preceding that time (the 200-day test); and
(ii) the individual's continued presence in Australia was not subject to any limitation as to time imposed by law (the no-limitation test).
An individual who is not an Australian citizen has to pass both of these tests to be classed as ordinarily resident in Australia at the relevant time. If they fail either one of them then they will not be ordinarily resident and that will make them a foreign person potentially liable to surcharge land tax.
But there are some exemptions from the surcharge, and one of them is the principal place of residence exemption in s 5B of the LTA. That exemption provides as follows:
5B Surcharge land tax - residence requirement applying to principal place of residence exemption
(1) A person is eligible for an exemption from liability to pay surcharge land tax in respect of residential land for a land tax year because the land is the principal place of residence of the person only if -
(a) the person is a permanent resident at midnight on 31 December of the previous year, and
(b) the Chief Commissioner is satisfied that, during the land tax year, the person intends to use and occupy the land as the principal place of residence of the person in accordance with the residence requirement, and
(c) the person lodges a declaration with a land tax return required to be furnished under section 12 of the Principal Act for the land tax year to the effect that the person has that intention.
(2) The person must use and occupy the land as the person's principal place of residence for a continuous period of 200 days in the land tax year. This requirement is referred to as the residence requirement.
(3) If the residence requirement is not complied with by the person, surcharge land tax liability is to be assessed or reassessed as if the person's exemption from liability to pay surcharge land tax for the land tax year had never applied.
[19]
Was Ms Guo liable to surcharge land tax?
Ms Guo is not an Australian citizen. At all relevant times, she was a permanent resident.
As noted above, the legislation was amended in respect of the 2023 land tax year. However, the discretion in s 5B(2B) for a "brief physical absence" does not apply as Ms Guo was not present in Australia at any time since late 2019. Accordingly, s 5B(2A) compels the conclusion that the requirements for the exemption are not satisfied for that year.
Accordingly, in respect of the relevant years:
1. Ms Guo was not present in Australia for a continuous period of 200 days in any of the relevant calendar years from 2018 to 2022;
2. Ms Guo was not "ordinarily resident" in Australia, and was therefore a "foreign person";
3. She did not satisfy the "residence requirement" in s 5B(2) of the LTA;
4. She did not satisfy the requirements for the exercise of a discretion in s 5B(2B) in respect of the 2023 tax year; and
5. As a result, she was liable to surcharge land tax as assessed.
[20]
Unfair and unjust?
It accept that Ms Guo has a close connection to Australia and that she clearly regarded the Property as her family home: she didn't own another one; it was where she and her husband lived whenever they were in Australia; they had migrated to Australia in 2014 to live; it was where her husband continued to live when she was visiting her mother in China; and she intended to return to the Property as soon as circumstances permitted. I also accept that her mother was ill, that Ms Guo caught COVID-19, and that she was unable to return to Australia for some time. However, even as those circumstances of the pandemic passed, she remained overseas. Because land tax is an annual tax, it is necessary to consider the circumstances also on a year-by-year basis.
Mr Zhou, her husband, was an Australian citizen. If the Property had been purchased in his name, the outcome may have been different. But the assessments relating to Ms Guo must be determined on her own facts and circumstances, and not the circumstances of Mr Zhou.
I agree with the submissions of the Respondent that general notions or fairness or justice do not allow the adjustment of tax liabilities in the absence of a clear statutory discretion to do so: Federal Commissioner of Taxation v Ryan (2000) 201 CLR 109, at 123 [30].
The Tribunal has repeatedly noted that there is no general discretion to waive, or to grant a "one off" exemption from, land tax or surcharge land tax for which a taxpayer is liable even if the imposition of the tax may visit hardship or unfairness on the taxpayer or result from circumstances (such as family responsibilities or travel restrictions) that deprived the taxpayer of effective moral or legal choice in relation to his or her absence from Australia: this principle has been consistently endorsed by the Tribunal in cases such as Zhang v Chief Commissioner of State Revenue [2023] NSWCATAP 283 at [20], Sjarifudin v Chief Commissioner of State Revenue [2021] NSWCATAD 347 at [45] to [48], Chu v Chief Commissioner of State Revenue [2021] NSWCATAD 238 at [32] to [34], Lawrence v Chief Commissioner of State Revenue [2022] NSWCATAD 266 at [38], Du v Chief Commissioner of State Revenue [2022] NSWCATAD 329, at [39] to [47], Feng v Chief Commissioner of State Revenue [2024] NSWCATAD 56 at [49], and Song v Chief Commissioner of State Revenue [2023] NSWCATAD 301 at [80].
[21]
Orders
The correct and preferable decision is to affirm the assessments issued by the Respondent.
I therefore make the following order:
1. The assessments to land tax and surcharge land tax are affirmed.
[22]
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
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 17 October 2024
The assessments to land tax and surcharge land tax for the 2019 to 2023 land tax years are affirmed.
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.
On the basis of my conclusions above, the correct and preferable decision is that the exemption in cl 2 of Sch 1A of the LTMA does not apply for any of the land tax years assessed.
For the 2023 land tax year, s 5B of the LTA included the following additional provisions:
(2A) A person does not use and occupy land as the person's principal place of residence during a period of the person's physical absence from Australia.
(2B) The Chief Commissioner may, in exceptional circumstances, waive the requirement in subsection (2A) in relation to a person's brief physical absence from Australia.
It is clear from the legislation that, for the 2019 to 2022 (surcharge) land tax years, a person claiming the exemption under s 5B must actually comply with the residence requirement, and not just intend to do so. In other words, the person must actually "use and occupy the land as their principal place of residence for a continuous period of 200 days in the land tax year": LTA, s 5B(2). If they don't comply with the residence requirement, the surcharge land tax liability is to be assessed or reassessed as if the exemption for the land tax year had never applied: LTA, s 5B(3).