Jones v Chief Commissioner of State Revenue [2025] NSWCATAD 324;

1. Land tax is an annual tax, levied on the taxable value of all land in New South Wales unless it is exempt: Land Tax Management Act 1956 (NSW) (LTM Act), s 7. It is charged on land (other than exempt land) owned at midnight on the thirty-first day of December immediately preceding the year for which the land tax is levied: LTM Act, s 8.
2. The relevant potential exemption in this case is the principal place of residence (PPR) exemption. This is provided for in s 10(1)(r) of the LTM Act; the detailed exemption requirements are found in Schedule 1A to that Act.

1. The starting point is subclause 2(1) in Schedule 1A, by which the exemption applies to land that is 'used and occupied by the owner as the principal place of residence of the owner of the land, and for no other purpose'. The provision is qualified by subclause 2(2):

(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.

1. Schedule 1A contains a number of concessions that allow the PPR exemption to apply even if the criteria in clause 2 are not met. One such concession is the concession for absences from the owner's former PPR, as detailed in clause 8. Under this provision you are taken to be still using and occupying land that has been your PPR, even though you have moved out of it, provided (subclause 8(1)):

(a) you had used and occupied the land as a PPR for a continuous period of at least 6 months; and

(b) you don't own any other land that you use as a PPR.

1. You lose the benefit of that concession if you are absent from the property for more than 6 years: subclause 8(2).
2. There is a further restriction in subclauses 8(6) and (7): you can't derive income from someone else's use or occupation of the property, other than:

(a) rental or similar income under a lease or licence granted for a continuous period of 6 months, or a total of 182 days in a tax year; or

(b) income up to a level that is reasonably required to cover council, water and energy rates and charges and maintenance costs for the property.

1. There is no dispute about the underlying facts.
2. Ms Jones purchased the property in May 2018 and lived in it continuously from then on, as her PPR. Her mother died suddenly in 2023. Her father, now living by himself on his cattle property in northern NSW, required significant emotional and practical support, so Ms Jones decided to move in with him and rent out her Sydney home.
3. Ms Jones entered into an agreement for the rental of the Sydney property from 23 December 2023 to 5 January 2025. Ms Jones explained that her letting agent had suggested the tenancy period of slightly more than 12 months so as not to inconvenience the tenant with a termination date in the middle of the Christmas period. At the end of the tenancy period Ms Jones moved back into the property, on 5 January 2025.
4. Ms Jones says, and I accept, that her decision to move out of the Sydney property was not made for investment purposes but 'as a necessity during a period of personal hardship'. She was driven by deep compassion for her father and not by lifestyle considerations or by the prospect of financial gain.

1. It is clear, as Ms Jones concedes, that the PPR exemption in clause 2 of Schedule 1A does not apply, and also that the clause 8 concession is not available.

1. Paragraph 2(2)(a) doesn't apply because Ms Jones was away from the property for the entire period from 1 July 2024 to 31 December 2024. Also, paragraph (b) isn't available since, as at midnight on 31 December 2024, Ms Jones was plainly not using and occupying the property as her PPR. It is not open to the Chief Commissioner (or to the Tribunal on review) to be satisfied that she was.
2. But how differently things could have turned out if Ms Jones had not done the tenant the courtesy of allowing the lease to go beyond 31 December 2024. If the lease had expired after exactly 12 months, and assuming Ms Jones had moved back into the property immediately, then it is likely that the Chief Commissioner, as at midnight on 31 December 2024, would have been 'satisfied that the land [was being] used and occupied by the person as the person's principal place of residence', thus attracting the exemption under paragraph (b).
3. Unfortunately for Ms Jones, those are not the facts.

1. The restrictions in subclauses (6) and (7) are against Ms Jones. Once the tenancy agreement exceeded 6 months, the income had to be no more than was reasonably required to cover rates and charges and maintenance costs. Ms Jones did not suggest the weekly rental amount was arrived at to recover ongoing costs; instead the property seems to have been rented out at full market rates, and in Ms Jones' words 'to assist with the financial burden of maintaining two households'. The clause 8 concession isn't available.

1. There is no exemption available in Ms Jones' circumstances. That means land tax is payable for the 2025 land tax year.

1. Ms Jones urges the Tribunal to release her from the liability to pay land tax for the 2025 land tax year, even though I have concluded (and Ms Jones acknowledges) that there is no exemption available.
2. The Tribunal has no power to do what Ms Jones asks. This is because a person's liability to tax, or exemption from tax, is determined solely by what the relevant legislation says. And in Ms Jones' case, the legislation clearly states that the property is subject to tax for the 2025 land tax year, and there is no exemption available.
3. Neither the Chief Commissioner nor the Tribunal has the authority to undo what the law does, whether for the sake of perceived fairness, or on compassionate grounds, or for any other reason - unless, of course, the law specifically provides such relief. And in Ms Jones' case, it doesn't.
4. The Tribunal has made this point in several of its decisions in recent years. For example, in Bright v Chief Commissioner of State Revenue [2015] NSWCATAD 80, Senior Member Isenberg stated at [28]:

... [L]and tax is payable by the owner of all land other than land which is exempt from taxation under the LTM Act. The LTM Act does not provide a general discretion to the Chief Commissioner (or the Tribunal) to take into account special circumstances that may apply in respect of a land owner, including hardship, which are not the subject of an exemption under the Act. Volpatti v Chief Commissioner of State Revenue [2007] NSWADT 222 at [12] and [27] and Loomes v Chief Commissioner of State Revenue [2014] NSWCATAD 133 at [37].

1. Ms Jones says her case involves aspects of bereavement and carer responsibilities and for that reason her circumstances differ from those in Bright. But the principle referred to in Bright applies across the board. What matters is the fact that the exemption doesn't apply; the underlying reason for not attracting the exemption is not part of the enquiry.

1. Ms Jones' request for a proportional reduction of her liability, based on the fact that she used and occupied her Sydney property as her PPR for all but a handful of days during the 2025 land tax year, must also be rejected. The law does not provide for a reduction in liability of that kind.

(1) The land tax assessment for the 2025 land tax year 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.