Lennox v Chief Commissioner of State Revenue

Applicable legislation

1. The exemption from land tax that is claimed to be engaged in this case is under s 10Q of the LTM Act, which at all relevant times provided as follows: 10Q Low-cost accommodation - exemption/reduction (1) Land is exempted from taxation under this Act leviable or payable in respect of the year commencing on 1 January 1995 or any succeeding year if - (a) the land is used and occupied primarily for low cost accommodation, and (b) application for the exemption is made in accordance with this section, and (c) the Chief Commissioner is satisfied that the land is so used and occupied in accordance with guidelines approved by the Treasurer for the purposes of this section. (2) The guidelines may include provisions with respect to the following - (a) the circumstances in which accommodation is taken to be low cost accommodation, (b) the types and location of premises in which low cost accommodation may be provided, (c) the number and types of persons for whom the accommodation must be provided, (d) the circumstances in which, and the arrangements under which, the accommodation is provided, (e) maximum tariffs for the accommodation, (f) periods within which tariffs may not be increased, (g) the circumstances in which the applicant is required to give an undertaking to pass on the benefit of the exemption from taxation (or, if subsection (4) applies, the reduction in taxation) to the persons for whom the accommodation is provided in the form of lower tariffs. (3) A guideline may - (a) apply generally or be limited in its application by reference to specified exceptions or factors, or (b) apply differently according to different factors of a specified kind, or both. (4) If the Chief Commissioner is satisfied that part only of land or premises is used and occupied primarily for low cost accommodation in accordance with the Treasurer's guidelines, the land value of the land is to be reduced for the purposes of land tax in accordance with the principles in section 10R (3)-(3C). (5) This section does not apply to an owner of land in respect of a tax year unless - (a) the owner applies to the Chief Commissioner for the exemption or reduction, in the form approved by the Chief Commissioner, and (b) the owner furnishes the Chief Commissioner with such evidence as the Chief Commissioner may request for the purpose of enabling the Chief Commissioner to determine whether there is an entitlement to the exemption or reduction. (6) Without limiting the other ways in which this section may cease to apply to a person, it ceases to apply to a person if the person breaches an undertaking given as referred to in subsection (2) (g).
2. The relevant guideline under s 10Q is in Revenue Ruling LT 107, which relevantly provides as follows: Guidelines approved by the Treasurer 4. The guidelines under which land used to provide low cost accommodation is exempt from land tax for the 2020 land tax years are as follows: i. Owners of land who provide low cost accommodation (not being licensed premises or a boarding-house) are entitled to an exemption from land tax or a reduction in the taxable value of the land for 2020 if the premises are used or partly used to provide low cost accommodation and the land is situated within a 5 kilometre radius of 1 Martin Place, Sydney (the former Sydney GPO Building) and: a. each tenancy is subject to a Residential Tenancy Agreement under the Residential Tenancies Act 2010; and b. the tenant used and occupied the residential premises or part of the premises for residential purposes and for no other purpose for the 6 months ending on 31 December 2019; and c. the maximum weekly tariff1 paid under a Residential Tenancy Agreement during this 6 month period was no more than the tariff limit specified in paragraph 4; and d. the owner gives an undertaking to pass on a benefit to the tenant(s), broadly equivalent to the value of the land tax exemption or reduction in taxable land value to the owner. The benefit may be passed on in one or more of the following forms: A. reducing the tariff; or B. forgoing an increase in tariff that would otherwise have occurred under the Residential Tenancy Agreement; or C. carrying out work, improvements or renovations to the premises including work required to comply with Council regulations and fire safety regulations. i. An exemption or a reduction in the taxable land value is not applicable where any of the persons using and occupying the land was a member of the family of the owner; or, if the land is owned by a company, by a director or shareholder of that company, or by a member of the family of a director or a shareholder of that company. ii. A member of the family of the owner or a member of the family of a director or a shareholder means a person who could possibly be entitled under the Succession Act 2006 to an inheritance should the owner, director or shareholder die intestate. iii. The concession still applies if there were circumstances beyond the owner's control which prevented the premises being used and occupied by a tenant for any part of the prior 6 months. 4. The maximum tariffs charged for the 6 month period of 1 July 2019 to 31 December 2019), excluding the Commonwealth's GST, are: i. $261 for one-bedroom accommodation; and ii. $347 for two-bedroom accommodation; and iii. $432 for three or more-bedroom accommodation.
3. Neither ss10Q(1)(a) nor (b) is in issue in these proceedings. This application turns on whether s 10Q(1)(c) is satisfied, which requires the tribunal to determine whether it is satisfied that the use and occupation of the property was in accordance with the guidelines referred to in that paragraph. The issue is thus whether the property was used and occupied in accordance with those guidelines at the relevant time.
4. That issue consists of two sub- issues: 1. whether the tariffs for the apartments in the property exceed the maximum allowable tariff, and 2. whether cl 4(ii) applies to disallow any exemption on the ground that a family member of the lessor used and occupied the property during the relevant period.

The evidence

1. The facts are not in dispute and neither party called oral evidence. The respondent relied on documentary material, including exhibits R1 and R2, and the applicant on exhibit A1. Both parties made written and oral submissions.

Applicant's submissions

1. The applicant's written submissions filed on 17 February 2021 (exhibit A2) began with an overview of her case, which was that: 1. the tariffs charged were reasonable if one considered all that was included in them and if one deducted GST paid in the 2019 calendar year from the tariffs; 2. rulings 106 and 107 contained contradictions and ambiguities, including that they included clauses providing for partial exemption, but another clause states that a land tax exemption of any kind is not allowed if any relative uses and occupies the land. Reference to using and occupying the land was inappropriate for a property that provides multiple occupancies, each on a separate tenancy agreement, in which the lessor's daughter only lived in one of seven flats. For that one flat the applicant is more than happy to pay land tax pro rata. 3. A clause in the legislative scheme of s 10Q allowed for discretion in the factors that were to be considered when interpreting rulings 106 and 107; and 4. Being charged land tax of $12,588.65 made operating *** George Street, Redfern unviable and would discourage the applicant and other private individuals from providing much-needed low-cost accommodation. That had socio-economic implications for individuals, communities and the government.
2. The applicant rejected the respondent's claim that the definition of "tariff" in the boarding house ruling (LT 106) should be applied to LT 107 (LCA) because boarding houses and LCA did not include the same items in a tariff, such as furniture, utilities, Internet and cleaning. In LT 106, the maximum tariffs for two people living in one room of a boarding house was $432 per week. In LT 107, the maximum tariff for a one-bedroom low-cost dwelling was $261 per week and for a two-bedroom dwelling $347 per week. The discrepancy in maximum tariffs showed that the definition of "tariff" in LT 106 and 107 was not the same, or at the very least was ambiguously used to result in different maximum tariffs to be allowed.
3. The tariffs for *** George Street included items that are not normally included in other low-cost accommodation or boarding houses, as most LCA were unfurnished, with the tenant responsible for all utilities, refrigerators and other kitchen implements. Most boarding houses had a shared kitchen, while the seven apartments in the property each had its own self-contained newly-renovated kitchen, with all equipment, utilities, cleaning of bathrooms, carpets and courtyards, Internet, refrigerator, microwave, utensils, mugs, glasses, crockery and pots and pans.
4. Further support for the position that "tariff" could refer to different inclusions was demonstrated by LT 106's distinction between the maximum tariff for a boarding-house that did not supply full board, and one that did. But these days, few boarding houses supplied full board.
5. The respondent had argued that items other than rent (which contains no GST) were to be included in the tariff. That fact was not in dispute, as most landlords paid for property management fees, building insurance and other goods and services that carried GST. Thus, GST being a legitimate deduction to work out if the tariff was eligible for a land tax exemption did not clarify what a tariff includes. If the applicant deducted all GST paid in 2019 from the tariffs charged, the tariffs fell well below the maximum allowed.
6. That her daughter occupied one of the seven apartments in 2019 should not automatically exclude the applicant from any land tax exemption. Clause 2 of the preamble to LT 107 states that "If only part of the land is used to provide the low-cost rental accommodation, it may be entitled to a reduction in taxable value rather than a full exemption", thus allowing for a partial exemption. The phrase "using and occupying the land" was inappropriate for a property that provided multiple occupancies, each one on a separate tenancy agreement. Her daughter had rented Flat 5 in 2019 and paid an all-inclusive tariff of $320 a week. She did not occupy the land, but rather one flat on one tenancy in a building of seven apartments.
7. Six of the seven flats in the property provided LCA based on the tariffs charged. If a family member was to be discriminated against (and the applicant's daughter was given from Friday to Monday to move from Melbourne to Sydney to start a new job), then at least an exemption should be allowed for the other six tenancies in the building.
8. There was a discretionary power allowing factors not considered by the rulings to be taken into account. Section 10Q(3) provided that "a guideline 'may' (a) apply generally or be limited in its application by reference to specified exceptions or factors, or (b) apply differently according to different factors of a specified kind, or both". The applicant's case rested on that discretion in terms of working out whether the tariff for each tenancy falls on or below the maximum allowed. That a family member was living in one of the apartments should not negate an exemption for the other six flats.
9. Being charged a high land tax made running the property unviable. That was relevant not only for the applicant, but also for the broader socio-economic needs of individuals, communities and the government. Those issues are becoming increasingly critical. The applicant has shown a 20-year commitment to providing low-cost accommodation because of an awareness based on 15 years of personal experience in her youth. She considers that the property provides a social and economic service to individuals and the community, in that people who have stable, clean, secure accommodation are more likely to get a job and have more stability in life. Under the current rulings, few honest landlords could afford to supply quality low-cost accommodation.
10. If the New South Wales government wanted low-cost accommodation in the inner city, then it needed to provide more public housing, or conduct a major review of the guidelines in Rulings 106 and 107 so that the guidelines are clear and private individuals can afford to supply low-cost accommodation, that being a much-needed service to individuals, the community and government.
11. At the hearing the applicant reiterated those points and added that she had the benefit of the land tax exemption for 18 years, which was revoked only in 2020. LT 107 contains no definition of "tariff", and the respondent was ignoring realities by treating the definition in LT 106 as incorporated in LT 107. A boarding house could be anywhere, but an LCA property had to be within 5 km of Martin Place. Boarding houses provide facilities, but not a kitchen, or at most a shared kitchen. All of her apartments had a fully equipped kitchen and all utensils. Most LCA units are unfurnished, and require the tenant to pay for utilities and the like.
12. A landlord's expenses have increased by more than the CPI. With all 2019 expenses included, the tariff charge was well below the maximum allowed, even without taking into account the extensive capital works she had carried out. The inventories for the apartments showed how many new items had been incorporated: new refrigerators, ovens, windows and carpets. She was doing the best by her tenants, some of whom had stayed there for 17 years.
13. Two of her tenants had refused an offer of Housing Commission (Department of Housing) accommodation in favour of remaining at the property. It was necessary to look at the bigger picture, and LCA was in the interests of all. The applicant's goal was to provide accommodation that she herself could live in.
14. In prior years, the Chief Commissioner had displayed some flexibility. The guidelines contained a discretion to take other matters into account. The rulings were not as binding as the respondent maintained. The respondent maintained that her daughter's living in one of the apartments eliminated the possibility of an exemption, but that was not consistent with LT 107's allowing a partial reduction in land value if only part of the property was used for LCA.
15. The George Street property contained more provisions than any other LCA. If unsuccessful in these proceedings, the applicant would take the matter further and seek to have the law changed. If she could not succeed in that regard, she would convert the premises to a single house and leave the LCA field.

Consideration

1. Under s 63 of the Administrative Decisions Review Act 1997 (ADR Act) the tribunal's role is to determine whether, having regard to the underlying facts in the matter and the applicable law, the Chief Commissioner's decision is the correct and preferable one. The tribunal is to review the merits of the original decision and is required to consider the evidence available at that time, together with any other or later material, so as to affirm the original decision, vary it or set it aside: Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60, 77.
2. Land tax is an impost designed to encourage the improvement and development of land (JA Coughlan, "Land Value Taxation and Constitutional Uniformity" (1999) 7 George Mason Law Review 261). Under ss 7, 8 and 9 of the LTM Act, land tax in this case is chargeable on the taxable value of the property for the tax year on the basis of the ownership of the property in question at midnight on 31 December 2019. It is not disputed that on the assessment date, the applicant owned the property. The applicant is prima facie liable for land tax in respect of the year 2020 on the basis of the taxable value of the property, unless she can establish that it was exempt from land tax.
3. The applicant's position is that she is entitled to exemption from land tax under s 10Q of the LTM Act for land used and occupied for low-cost accommodation (LCA). One of the requirements for that exemption is that the respondent (and by derivation this tribunal) is satisfied that the land is used and occupied in accordance with guidelines approved by the Treasurer under that provision. The respondent was not satisfied that the property was used and occupied in accordance with those guidelines and accordingly formed the view that the applicant was not entitled to the exemption and assessed her to land tax (exhibit R2, pp 287 - 291).
4. In these proceedings the respondent advanced two reasons tor that view, either of which if accepted would suffice for the application for review to be dismissed. The first is that the rents charged by the applicant to the tenants for the use and occupation of the property in the relevant period exceeded the tariff limits prescribed by the guidelines. The second was that the applicant's daughter resided in one of the flats in the property for part of the relevant period, and the use and occupation by any family member for any part of the relevant period completely excludes the applicant from the exemption.
5. The guidelines are issued pursuant to the power granted to the Chief Commissioner by s 10Q(1)(c) of the LTM Act. Two sets of guidelines relevant to this case have been issued. One is titled "Land Used and Occupied Primarily for a Boarding House" (Boarding House Guidelines - see revenue Ruling LT 106), and the other is titled "Land Used and Occupied Primarily for Low-Cost Accommodation" (LCA Guidelines - see Revenue Ruling LT 107).
6. The former are not directly involved in this application, although they are relevant to the interpretation of the LCA Guidelines. It is not disputed that the Boarding House Guidelines do not apply here because the definition of "boarding house" does not include premises used and occupied by persons subject to a residential tenancy agreement under the Residential Tenancies Act 2010, whereas in this case all of the apartments in the property were occupied by persons subject to a residential tenancy agreement.

The maximum weekly tariff

1. The LCA Guidelines apply to certain premises that are not boarding houses where each tenancy is subject to a residential tenancy agreement. One of the requirements for the LCA Guidelines to apply is that the tariff paid under the tenancy agreements during the six months prior to the start of the relevant land tax year is less than the prescribed tariff limits (cl 4(1)).
2. Under the guidelines for the relevant period (1 July 2019 to 31 December 2019), the maximum tariff that could be charged was $261 for one-bedroom accommodation. It was not disputed that all seven flats in the George Street property were one-bedroom. The rentals charged ranged, however, from $285 to $340 per week. Consequently, prima facie all exceeded the maximum tariff permitted by the guidelines.
3. As the LCA Guidelines contain no definition of a number of terms, including "tariff", the respondent used the definition in the Boarding House Guidelines, which is, "' Tariff" means the cost of the room or bed as well as electricity, water and other charges, excluding Commonwealth GST'".
4. The applicant objects to the use of that definition on two grounds: first, that boarding houses and LCA did not include the same items in the tariff such as furniture, utilities, Internet and cleaning. The tenancies for the George Street property, however, included items that are not normally included in other low-cost accommodation or boarding houses. Most LCA are unfurnished, with the tenant responsible for all utilities, refrigerators and other kitchen requirements. Most boarding houses had a shared kitchen, while the seven apartments in the property each had its own self-contained newly-renovated kitchen, with all equipment, utilities, cleaning of bathrooms, carpets and courtyards, Internet, refrigerator, microwave, utensils, mugs, glasses, crockery and pots and pans.
5. The applicant's unchallenged evidence showed that those expenses cost around $77 per week per flat, and that took no account of capital works. If the expenses were deducted from the tariffs, then the rent for each flat would fall well below the maximum allowed for LCA. The applicant contends that the interpretation of the LCA Guidelines does not entail adopting the definition of "tariff" in the Boarding House Guidelines, which have a similar structure.
6. The two sets of guidelines are necessarily complementary, however. Thus, they must be read together so that, for example, the term "boarding house" as used in the LCA Guidelines has the meaning given to it by the definition of that term in the Boarding House Guidelines. Otherwise, a property that was a boarding house in reality where each tenancy was subject to a residential tenancy agreement could never satisfy either set of guidelines. It would not meet the requirements of the Boarding House Guidelines, as the tenancies were subject to residential tenancy agreements, but it also could not satisfy the LCA Guidelines as it was a boarding house.
7. Conversely if the definition of "boarding house" from the Boarding House Guidelines is read into the LCA Guidelines, the two guidelines operate sensibly because that definition excludes premises where each tenancy is subject to a residential tenancy agreement. Consequently, premises that do not fall within the Boarding House Guidelines because the tenancies are subject to residential tenancy agreements (such as the property in question) are still capable of meeting the requirements of the LCA Guidelines, despite being a registered boarding house (as the property in this case is).
8. To give the LCA guidelines a sensible operation, it is therefore necessary to recognize that some definitions have been omitted from them and are to be found in the Boarding House Guidelines. Subordinate legislation such as the guidelines is not necessarily scrutinized to the same extent as a Bill, and it is permissible to have regard to the lesser degree of scrutiny and care in drafting that applies to them and to take a more flexible approach to construction: Day v Harness Racing New South Wales [2014] NSWCA 423, [79] - [84]; (2014) 88 NSWLR 594.
9. Further, as both sets of guidelines were approved together at the same time, they may be viewed as part of a scheme of delegated legislation, and as such it is possible to have regard to each of them for the purposes of construing expressions used in any one of them: Sweeney v Fitzhardinghe (1906) 4 CLR 716, 726; R v Mailes (2001) 53 NSWLR 251, 272 [108]. Schematic construction is a well-established approach to statutory interpretation: D Pearce, R Geddes, Statutory Interpretation in Australia, 8th edn 2018, 129 - 131.
10. The Treasurer's Second Reading Speech introducing the 1994 Amending Act, which introduced s 10Q(2)(e) in its present form providing for the guidelines establishing "maximum tariffs for the accommodation", suggested that the concept of tariff would have the same meaning as it did under the existing guidelines: "The current guidelines relating to boarding houses will continue largely unchanged. New guidelines will be formulated relating to other forms of low-cost accommodation, although similar tariff limits to those specified in the boarding house guidelines will apply" (my emphasis).
11. The tribunal has no discretion in relation to the application of the guidelines. The applicant submitted that the phrase "A guideline may", which introduces s 10Q(3), imports a discretionary power so that factors not considered by the rulings could legitimately be taken into account. The submission continued: "The Applicant's case rests on this discretion in terms of working out whether the tariff for each tenancy falls on or below the maximum tariff allowed…."
12. But the language relied on appears in the context of provisions conferring the power to make guidelines, similar to the grant of regulation-making power commonly found in other primary legislation. It plainly confers a discretionary power in relation to the contents and drafting of the guidelines, not to their application by a decision-maker.
13. Moreover, the guidelines operate as a form of delegated legislation, not as a source of ideas and guidance for the decision-maker. They are binding rules that limit the availability of the s 10Q exemption and the tribunal must determine whether the requirements are met. Thus, in Perry Properties Pty Ltd v Chief Commissioner of State Revenue [2013] NSWCA 274, the Court of Appeal explained that the purpose of the guidelines was not simply to provide guidance in the exercise of the statutory powers. They could, for example, be used to encourage particular outcomes. The Chief Commissioner was given no power to approve or vary the guidelines: [25], [29]. "The Chief Commissioner is not exercising a discretionary power and the purpose of the guidelines is not to provide guidance in the application of s 10Q(1)(c)" (at [34].
14. That view was adopted in Antegra Pty Ltd v Chief Commissioner of State Revenue [2021] NSWSC 107, which quoted from Perry at length and emphasized that the decision-maker was obliged to apply the guidelines and could not seek to re-write them on policy grounds: ([95], [96] - [97].
15. The applicant pointed out that the maximum tariffs specified in the guidelines were expressed in a footnote to exclude GST. From that it was contended that, as rent itself is not subject to GST, the taxpayer was entitled to deduct from the tariff all the amounts of GST that had been paid for management fees, insurance and other goods and services carrying GST.
16. But as rent as such is input taxed and exempt, rent could never include any amount of GST. The provision in the guidelines that maximum tariff limits exclude GST must contemplate that there could be some tariffs that include a GST component because they include other goods or services. Thus, hypothetically, a lessor providing accommodation for workers constructing a city Metro station might provide, and charge for (with GST) in the rent, bus transport to take them to and from their workplace. Moreover, if the intention of the guidelines were to provide for the deduction of all GST paid by the lessor, one would expect to see a much more detailed description of the process to be followed for that purpose.
17. The applicant's evidence contained a substantial volume of material supporting her claim that she has expended more on the apartments and their fittings and furniture than would normally be expected in LCA. For example, the bathrooms have been renovated to a standard that one might expect to see in a respectable motel: see exhibit A1, pp 59- 61. Passageways, laundries and courtyards have been transformed: id. pp 62 - 66.
18. Again, the inventory for Flat 3, which has been freshly painted, shows, apart from a bed and mattress, a large number of items which, on the evidence, would not normally be found in LCA, including quilt cover, sheet set, mattress protector, Westinghouse bar refrigerator, oven with 2 cooktops, dining table, built-in wardrobe, chair, white bin, cutlery set, glasses, mugs, dinner set, set of big knives, peeler and can opener, chopping board, set of pots and pans, microwave oven, wall mirror, wall heater and fire blanket. Fifteen of the 20 items are new: id., pp 86 - 89. There is a photograph of the renovated kitchen: id., 90. Similar documentary evidence relating to the other apartments is included in exhibit A1. None of this evidence was challenged, nor was the applicant's estimate that the extras included in the tenancy cost approximately $77 per week for each apartment.
19. The photographs, inventories and other evidence provided by the applicant support her contention that her George Street property offers accommodation of a standard above that normally found in that price range. But all textual and contextual factors, viewed in light of the accepted principles of legal interpretation, lead to the conclusion that the term "tariff" in the LCA Guidelines has the meaning which the respondent attributes to it, which is the definition used in the Boarding House Guidelines: "'Tariff' means the cost of a room or bed as well as electricity, water and other charges, excluding Commonwealth GST". It thus includes the whole amount of the weekly rent payable by a tenant, with no reduction for the value or cost of any "inclusions" or other extras. The relevant tariff is the rent payable.
20. Consequently, none of the tenancies in the property satisfied the maximum tariff limit imposed under the guidelines for the period 1 July 2019 to 31 December 2019 and the exemption under s 10Q cannot apply.

Where land is occupied by a family member

1. That conclusion suffices to determine the present application, but the respondent advances an alternative ground based on the LCA Guidelines, relating to occupation of the land by a family member. As the point was fully argued, it is appropriate to make a decision on it.
2. Clause 4 of Revenue Ruling LT 107 in pertinent part provides as follows: (ii) An exemption or a reduction in the taxable land value is not applicable where any of the persons using and occupying the land was a member of the family of the owner; or, if the land is owned by a company, by a director or shareholder of that company, or by a member of the family of a director or a shareholder of that company. (iii) A member of the family of the owner or a member of the family of a director or a shareholder means a person who could possibly be entitled under the Succession Act 2006 to an inheritance should the owner, director or shareholder die intestate.
3. It is not disputed that the applicant's daughter used and occupied part of the property for at least part of the period from 1 July 2019 to 31 December 2019 (it is not quite clear which part, but that is not material). Consequently, Mr Lewis submitted, the applicant is subject to a complete exclusion from any exemption or reduction in land value for the 2020 land tax year.
4. There can be no doubt that Dr Lennox's daughter is a member of her family. That phrase is defined in subclause (iii) as "a person who could possibly be entitled under the Succession Act 2006 to an inheritance should the owner, director or shareholder die intestate". In the event of the applicant's death intestate, there is a possibility that her daughter would be entitled to an inheritance by reason of s 127(1) of the Succession Act 2006. Consequently, the applicant's daughter is a member of the applicant's family for the purposes of the LCA Guidelines under subclause (iii). That, the respondent argued, completely excludes the applicant from any exemption or reduction in taxable land value under s 10Q for the 2020 land tax year under subclause (ii).
5. As against that, the applicant submitted that the phrase "using and occupying the land" is inappropriate for a property that provides multiple occupancies, each on a separate tenancy agreement. Her daughter rented Flat 5 in 2019 and paid an all-inclusive tariff of $320 a week. She did not occupy the "land", but rather one flat on one tenancy in a building consisting of seven flats, each with its own residential agreement. If one accepted her proposition that rulings LT 106 and 107 contained different interpretations for what is involved in a tariff, then 6 out of 7 flats at *** George Street, Redfern provided low-cost accommodation based on the tariffs charged. If a family member was to be discriminated against, at least a land tax exemption should be allowed for the other six tenancies in the building. She would be happy to pay land tax for one flat.
6. The LCA Guidelines do not allow for apportionment in that way, however. Clause 4(i) of LT 107 provides: Owners of land who provide low cost accommodation (not being licensed premises or a boarding-house) are entitled to an exemption from land tax or a reduction in the taxable value of the land for 2020 if the premises are used or partly used to provide low cost accommodation and the land is situated within a 5 kilometre radius of 1 Martin Place, Sydney (the former Sydney GPO Building) and: ….
7. Clause 4(i) of LT 107 provides two alternatives: an exemption from land tax or a reduction in the taxable value of the land. The former applies if the premises are wholly used in the way prescribed, and the latter if the premises are only partly used in that way. That implements s 10Q(4) of the LTM Act, which allows for a reduction in the land value of land that is only partly used in accordance with the guidelines.
8. Clause 4(ii) of LT 107, however, states that: An exemption or a reduction in the taxable land value is not applicable where any of the persons using and occupying the land was a member of the family of the owner….
9. That subclause recognizes that subclause (i) may provide for either an exemption or a reduction, depending on whether the requirements of subclause (i) are met in relation to the whole or only part of the land. Subclause (ii) then provides that, regardless of whether it is an exemption or a reduction that is applicable under subclause (i), that exemption or reduction is not available where "any" of the persons using and occupying the land was a member of the owner's family. That language is explicit, indeed categorical, in providing that use and occupation by a family member to any extent is sufficient for the owner to be completely disentitled from any exemption or reduction in taxable land value. The property is treated as a single parcel and there are no separate valuations for the separate apartments. The guidelines contain no discretionary power to vary that result.
10. If it had been intended that use or occupation by a family member would result only in a partial failure to satisfy the LCA Guidelines, and that permitted a pro rata reduction in taxable land value, that could easily have been provided for in the guidelines, and one would have expected to see it. But there is no such provision. I therefore find that the applicant is disentitled from any exemption or reduction in taxable land value for the 2020 tax year.

Conclusion

1. The applicant contended that being charged a high land tax made running the property unviable. That was relevant not only for the applicant, but also for broader socio-economic needs of individuals, communities and the government. The applicant had shown a 20-year commitment to providing low-cost accommodation because of an awareness based on 15 years of personal experience in her youth. She considers that the property provides a social and economic service to individuals and the community in that people who have stable, clean, secure accommodation are more likely to get a job and have more stability in life.
2. Dr Lennox believed that under the current rulings, few honest landlords could afford to supply quality low-cost accommodation. The George Street property contained more provisions than any other LCA. If she were unsuccessful in these proceedings, the applicant would take the matter further and seek to have the law changed. If she did not succeed in that regard, she would convert the premises to a single dwelling-house and leave the LCA field.
3. The unchallenged evidence indicates that the applicant is indeed performing a community service by providing the well-maintained apartments in *** George Street. Her proposition that living in clean and orderly surroundings helps people to have a more successful life, making it more likely that they will find employment and achieve other life goals is credible.
4. Nevertheless, for the reasons given above, the applicant is not eligible for an exemption or land value reduction in relation to land tax for the 2020 tax year. The applicant points out that in previous 18 years she had received the benefit of an exemption, but that apparently was because she was at that time operating the property as a registered boarding house, which she could do because the apartments were not occupied pursuant to residential tenancy agreements.
5. At all events the tribunal has no discretion on the points discussed above but must determine the application on the basis of the facts as established (in this case, admitted). Consequently, the decision under review must be affirmed.

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: 30 March 2021