(1) Subject to this Division, the following land is exempt land -

(a) land owned by a natural person that is used and occupied as the principal place of residence of that person;

1. As I previously stated, for the purposes of the principal place of residence exemption the land must be used and occupied since 1 July in the year preceding the tax year. Section 54(2) reads as follows:

(2) Subject to section 55, subsection (1)(a) or (b) only applies if the land has been used and occupied as the principal place of residence of the owner or vested beneficiary -

(a) since 1 July in the year preceding the tax year

(1) For the purposes of this Division, land is taken to be used and occupied as the principal place of residence of a person despite the person's absence from the land if the Commissioner is satisfied -

(b) that the person intends to resume use or occupation of the land as his or her principal place of residence after the absence;

1. Pursuant to s.36(1), of the Act, land for the purposes of the Act is to be assessed at Midnight on 31 December immediately preceding the tax year.
2. Pursuant to s.110 of the Taxation Administration Act 1997, the applicant has the onus of proving her case.
3. Because the tax is assessed on a single year, I must decide the use of the land in each particular year in question rather than aggregating the use. That is, I must decide whether the principal place of residence exemption applies in each of the six years.

1. I have already referred to the Applicant giving wrong information as to her previous principal place of residence and inconsistencies between what she actually stated in her written statement and what the documents showed. I will not repeat what I have said above.
2. The applicant stated, that she did not stay in the Valley Road property between the time of certificate of occupancy and the time the Millers moved in, because she was 'scared of her ex-husband'. She believed that her ex-husband would not know she was staying at Sorrento. Further she stated, that she was of the belief that the 'back-to-base' security system which she had at both the subject property and the Valley Road property, she was much safer in the subject property because the security people would be able to come to her place quicker. However she was unable to tell me where the Security Company for the Valley Rod property was located. She stated the Security Company for the subject property was located 'around the corner'. She further stated that because there was a long driveway at the Valley Road property and it was a much larger property in terms of the size of the land than the subject property, she felt safer at the subject property.
3. I found the explanation given by the applicant difficult to accept. In the Valley Road property, she had recourse to her children's help in near proximity should there have been any trouble, and one can never predict how long it would take a security guard to arrive at the property should an alarm be tripped.
4. Further, the fact that the subject property was referred to in the Intervention Order, would put her ex-husband of whom she was 'scared', on notice that she may be staying at that property. Therefore, if her ex-husband was determined to do her harm, he could find her just as easily at the subject property as he could at the Valley Road property. The subject property was no secret to the applicant's ex-husband. Further, the ex-husband worked at premises which were approximately across the road from the premises where the applicant worked. It would have been an easy exercise for him to follow her had he so desired.
5. It is difficult to accept, that the applicant would not have stayed at the Valley Road property, during the relevant periods bearing in mind the close proximity of those premises to the applicant's work and to her family. It defies belief, that the applicant would have led an itinerant lifestyle on an average of four days per week between her three children, when she had a house with furniture in it where she could have stayed in Valley Road.
6. The applicant travelled overseas four times during the relevant period. On the first occasion, she departed on 13 October 2010 and returned on 21 October 2010, a period of 8 days. On the second occasion, she departed on 26 October 2011 and returned on 10 November 2011, a period of 15 days. On the third occasion, she departed on 13 April 2014 and returned on 2 May 2014, a period of approximately 4 weeks, and on the final occasions she departed on 29 November 2014 and returned on 3 December 2014, a period of 4 days.
7. On each of the occasions where the applicant returned to Australia, she made a declaration that her intended address in Australia is, "8 Valley Road, Wonga Park, Victoria".
8. When asked about this matter, the applicant said that the Valley Road address was an address she was in the habit of giving and did not think about the matter. I find this statement extremely hard to accept. The applicant agreed, that it was unlikely that her ex-husband would have access to her incoming declaration forms. Thus the only reason, I can think of why the applicant would have used the Valley Road address is that is in fact where she was residing at that time. On the 2014 trips overseas, the applicant on her own evidence would have been living in the subject property six years. It defies belief that someone would use an old address after six years "out of habit".

1. At paragraph 32 of Ms Baker's submissions, she has produce a table setting out comparative water use in kilolitres per quarter for the subject property and the Valley Road property. Set out in Appendix B is paragraph [32] of Ms Baker's submissions including the table to which I have referred.
2. It is noticeable, that the table in Appendix B shows that for the March Quarters during the relevant periods, there was comparatively large use of water. The March Quarter takes in the Christmas/New Year/January period.
3. In that period the applicant stated that she stayed in the subject property with her family as her business was shut. The respondent did not contest that proposition. However, during the other periods, there was extremely low use of water and in some cases, the water usage was down to nil or 1, 2 or 3 kilolitres. This would indicate that the subject property was hardly being used at all.
4. Mr Prior, accountant who appeared for the applicant, submitted, that the typical water usage of 161 litres per day was accomplished on a daily basis by the applicant at the subject property, if one takes into account that she was only there at the property for an average of three days per week. The difficulty with Mr Prior's submission, is that the major use of the water occurred during the holiday period, not during a period where one would use a house for everyday purposes. That is, as the applicant's home. No doubt, the water usage during the holiday period was built up considerably because the applicant had her family staying at the subject property.
5. The applicant made reference to the fact that the garden at the subject property was watered by an automatic reticulated water system using bore water. She also stated, that she believed her hot water system was connected to the bore.
6. While the applicant may have believed that her hot water system at the subject property was connected to her bore, this would seem to be highly unlikely. The Mornington Peninsula Groundwater Regulations of which I was provided with an extract at Tab 67 state as follows:

Within the Mornington Peninsula Shire groundwater is found in the Port Phillip and Western Port groundwater basins. This groundwater is used for irrigation, stock watering and garden watering.

It is clear from these Regulations, that the groundwater cannot be used for the purpose of hot water. The applicant, who it will be remembered has the onus of proof in this matter, did not call any expert evidence to show that her hot water was connected to the groundwater. Therefore I reject that submission.

1. Mr Prior also referred to the fact that on two occasions within the periods where there was little or no water use shown, the applicant's credit card statement showed that she made two purchases in Sorrento on 23 June 2011. It is noted, that the quarter ending 1 September 2011 shows no use of water. Therefore he invited me to conclude that the table produced from the SouthEast Water letter in Ms Baker's submissions may not be correct.
2. However, Mr Prior himself stated that it is likely, that fractions of a kilolitre may not show up on the SouthEast Water statement. Therefore, some water could have been used. This may explain the date where the credit card was used where the applicant was obviously at Mornington. However, the applicant did not give evidence that she used water at the subject property on that particular date. Even if the applicant did use a small amount of water on that date, which was a week day, it does not show that the applicant was using the property as her principal place of residence.
3. Mr Prior also stated, that the use of water as shown in the table produced by Ms Baker at Valley Road, is explained by:

1. The applicant's son lived in a flat at the Valley Road property until 2012; 2. The Valley Road property consisted of 2 acres of garden which needed to be watered;

1. The Valley Road property had a swimming pool which needed to be "topped up";

1. When the horses were in the front paddock they needed to be watered; 2. After the Millers moved into the Valley Road property, the water consumption "jumped"; that is, after June 2013.

However, it must be remembered that Mr Miller had a wife and four children while the Valley Road property was rented. Thus, there were six people living in the Valley Road property at that time. Looking at all the circumstances in relation to the use of the water at the Valley Road property, in my view, even taking into account the matters that Mr Prior referred to, that amount of water would not be likely to be used unless the property was frequently used as a residence.

1. Bearing in mind that I have to decide not whether the applicant's principal place of residence was at the subject property or at the Valley Road property but rather whether her principal place of residence was the subject property, it thus follows, that I must look at the water usage at the subject property and ask whether somebody who used the property as their principal place of residence as the applicant has described, would be likely to use or not use the amount of water that has been consumed. In my view, on the balance of probability I have come to the conclusion that if the applicant was using and occupying the subject property in the manner in which she describes, a lot more water would have consumed in that property in the non-summer months. That is, the non-holiday period.

When asked why so little water was used at the subject property, the applicant simply said "I am unable to explain".

1. It is the applicant that has the onus of proof. Thus it was upon her to explain why so little water was used. She did not do so.
2. It is also noted, that Mr Prior said that the low water usage at the subject property could be as a result of the applicant spending time overseas. However, if one looks at the time the applicant was actually overseas, that submission does not have any credence.
3. I was also referred to gas, electricity and credit card use by the applicant, but I do not believe, that those matters take this matter any further, save for what I have stated below.

1. For the Principal Place of Residence exemption to operate, the legislation requires that I be satisfied that the subject property was the applicant's principal place of residence during each of the relevant periods. I am not required to find where the applicant's principal place of residence was during each of the relevant periods. If I am not satisfied that the subject property was not her principal place of residence, the applicant cannot succeed in these applications.
2. The case of Commissioner of State Revenue v Ferrington [2004] NSWADTAP 41; (2004) 57 ATR 170 at [183] is frequently cited in First Home Owner Grant cases as laying down the principles to determine whether a particular property is 'a principal place of residence'. While land tax 'principal place of residence' cases are not identical to 'first home owner principal place of residence' cases, it is useful to look at the principles which were announced by the New South Wales Tribunal. They are:

1. The words 'principal place of residence' should be given their ordinary meaning in the context in which they appeared; 2. Consideration of whether a person had been residing or occupying premises as their principal place of residence is to be assessed objectively in the light of circumstances relating to the actual occupation of the dwelling'

1. The intention of the person concerned, gauged objectively, is relevant but not determinative of the issue;

1. 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; 2. The short length of a person's residence, while relevant is not determinative of the issue. This is so the recipient's occupation of a home, while short, may have a requisite degree of permanency to it. But that will not happen if, when considered objectively, the occupation is transient, temporary, contingent or of a passing nature or for some other purpose. The fact that a period of actual occupation is short will in practice make it harder for the recipient to show that the occupation was his or her principal place of residence, but it will not make it impossible; and 3. 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.
2. In D'Amelio v Commissioner of State Revenue (Taxation) [2012] VCAT 265, Judge MacNamara, Vice President, said at [15] that the first three principles are:

General commentaries as to how the enquiry should be approached. The other three principles are substantive.

1. In this particular instance, the fifth and sixth principles are not particularly relevant to the present situation. However, the fourth principle needs to be considered. However, before that is done, I note, that the word 'principal' is not defined in the Act. Construed in accordance with its ordinary meaning it denotes 'main' residence of the person, or the 'first in order of importance' (see the definition of 'principle' in the Oxford Dictionary of English, 3rd Ed., 2010). Therefore, where a taxpayer has access to two or more properties it will be a question of fact and degree to determine if a particular property has been proven to be the principle place of residence of that taxpayer. It is in those circumstances that a comparative approach is mandated in s.53(2) of the Act.
2. In examining the fourth Ferrington principle, I must look at the objective matters so as to determine whether the subject property is the applicant's principal place of residence in each of the relevant periods.
3. Clearly, in the periods while the Valley Road property was being rebuilt and when the Millers were living in the Valley Road property, the Valley Road property could not have been the applicant's principal place of residence. However, that does not mean, in itself, that the subject property was the applicant's principal place of residence in those periods or any other period.
4. While the applicant gave evidence that she lived at the subject property: security cameras were installed, Foxtel was connected, she had books, a computer and printer and there was a fireproof safe to keep her jewellery, that in itself does not in my view take the matter any further. There is no question whatsoever that the applicant occupied the subject property, at various times, particularly during the holiday period. Ms Baker submitted, that it is likely that the subject property was the applicant's holiday home. I noted that the applicant gave evidence that she has previously had a holiday home at Sorrento.
5. Far more telling, is the applicant's lack of water consumption at the subject premises during the non-holiday periods. I have already dealt with this issue (see
6. Therefore in my view, the pattern of water consumption at the subject property by itself, is sufficient for me to find that in each of the relevant periods, the subject property was not the applicant's principal place of residence. It would tend to indicate that the subject property was being used as a holiday home and as an occasional place where the family or the applicant stayed at weekends.
7. Further, I am of the view, that the water consumption at the Valley Road property after the certificate of occupancy was issued, and before the Millers moved in, is not sufficiently explained by the applicant when she states that it was used for her garden, watering her horses, filling up her swimming pool and use by workmen who were doing some building work on the property.
8. When one considers that the applicant had a dam on the premises, where the water was used to provide drinking water for the horses, on the back paddock, I have difficulty understanding why there would be so much water used. The water consumption at the Valley Road property, is inconsistent with non-occupation of that property between the certificate of occupancy and the Millers entering into possession of the same as tenants. When coming to this conclusion, I take into account, that the applicant's son until early 2012 occupied an apartment at the Valley Road property above the garage.
9. I further note, that prior to the Milles moving into the Valley Road property, the applicants applied removalists to remove furniture from the house on that property. While the applicant stated that she was just using the house to place furniture in because she had spare, I find this difficult to accept and I do not accept that explanation. I find that the house was furnished and it was furnished because that was likely where the applicant was living.
10. In my view, the declaration that the applicant made in her return travel cards that her place of residence was the Valley Road property, indicates that that is where she believed she was living at those times. As I have previously stated, it defies belief that the applicant would have written that address on her card out of habit, if she had not been living in the property for 4 to 6 years. I agree, that the applicant did write the Valley Road property on her return entry declaration 'out of habit', because that is where she was in fact living.
11. While the applicant obviously could not have been living at the Valley Road property during the period of reconstruction, after the fire and while the Millers were in occupation, as I have previously stated that does not mean that the subject property was her principal place of residence. She may well have been residing with her children at that time, she may have been residing at some other premises, or she may not have had a principal place of residence at all. In my view, it does not matter. All that matters is that the subject property was not her principal place of residence and I so find.
12. I also note, that during the relevant periods, the applicant was registered, on the electoral roll and her driver's licence, as being at the Valley Road property. It is difficult to understand why she would have maintained those registrations at that property if, her principal place of residence was in fact the subject property.
13. I note, also, that during the relevant period the applicant used a number of addresses which included:

The Valley Road property, the subject property, her business property in Croydon, and a Post Office box.

In my view, this is inconsistent with the subject property being her principal place of residence.

1. In Black v Chief Commissioner of State Revenue (NSW) [2011] NSWADT 66 at [84] the New South Wales Tribunal, stated a number of objective considerations, that should be looked at, to determine whether a particular residence is a principal place of residence for land tax purposes. While the New South Wales legislation is different from Victoria, in my view for the purposes of the considerations laid down, those differences are not important. The differences stated by the New South Wales Tribunal in Black's case are:

(a) The amount of time that the residence is occupied and the pattern of occupation;

(b) Listing of the address of the person, for official purposes such as on a licence or on an electoral roll;

(c) Respective rights (of the taxpayer) in respect of the two properties;

(d) Relative location of clothing, furniture and possessions;

(f) Strength of ties and connection with the residence;

(i) The nature of insurance held for each property;

1. In relation to the amount of time that the applicant spent at the subject property, on her own evidence, it was an average of three nights per week. But I note that that is an average. The water bills tend to show that in the non-holiday period she spent very little time at that property as I have previously stated. I do not need to repeat what I have previously said, that the subject property was basically used as a holiday home.
2. I have also previously stated, that the applicant used, the Valley Road property for official purposes which include her driver's licence, electoral roll and entry card into Australia. I do not believe, that the fact that the applicant used the subject property as her address to the Australian Taxation Office takes this matter very much further, as in all probability, although no evidence was called, that the Australian Taxation documents would have been completed by a third party, namely her accountant. It is clear, that basically when the applicant was in charge herself of completing other official documents, the Valley Road address was the one she used.
3. Consideration (c) in Black's case, in my view, does not have great force in Victoria because of the difference between the New South Wales and Victorian legislation.
4. The consideration of where the applicant kept her clothing, furniture and possessions, must be considered. The applicant said that she kept all her clothing and her possessions such as jewellery, at the subject property. However I do not accept that as likely. If the applicant was staying in the Wonga Park/Croydon area for more than half a week as she stated, it is inconceivable that she would not have kept a considerable amount of clothing at some property in that area. Further I note, that there was furniture in the Valley Road property. While there may have been furniture, clothing and jewellery, in the subject property, that is, as I have found, consistent with its being a holiday house.
5. All the applicant's family members reside in the Croydon/Wonga Park area. The applicant is obviously very close to her family. She works with them and when giving evidence she referred to them often. Given those circumstances, it is almost inconceivable that the applicant would be living in the Sorrento area where the subject property exists, when all her family and her work are in the Croydon/Wonga Park area.
6. The applicant has strong ties with the Valley Road property. She gave evidence that that was the property where she brought up her family. She was unable to display any particular tie to the subject property save and except that Sorrento was where the family had a holiday house. She did not refer to any particular friends or relatives who were living in the area of the subject property. Thus I find that the applicant's ties were in the Croydon/Wong park area and not in the Sorrento area.
7. I have already largely dealt with water usage. While there was usage of electricity at the subject property, it is clear, that if the March bills are excluded, the usage is comparatively low. In my view the consumption of electricity can be explained by the continuous operation of the applicant's appliances at the subject property, such appliances being the refrigerator, and the security monitoring equipment. I also note, that there was continuous use of electricity during the relevant period at the Valley Road property. The level of electricity consumed at the Valley Road property was typically similar to or higher than the level of electricity consumed at the Sorrento property. This pattern continued until the billing period from 17 June 2013 to 11 September 2013, when the property was then occupied by the six members of the Miller family. It is noted, that the only billing period in which the electricity consumption in the subject property exceeded the Valley Road property was during the summer period from 8 December 2012 to 6 March 2013.
8. It is noted, that gas continued to be used at the Valley Road property throughout the period from May 2012 to July 2013 despite the fact that the applicant's evidence is that both the house and the flat property were unoccupied between 27 June 2012 and 6 June 2013. The applicant to some extent explained this matter by the fact that the Valley Road property has two 400L hot water services which continued running during this period because she did not realise that it would save gas by turning them off. While this may account for some use of gas, clearly, if hot water is not being used, even if the gas is not turned off, the use of gas would be less.
9. As I have previously stated, the applicant used many addresses for her bills, including the Valley Road address. She gave evidence that she had redirected the Valley Road mail to her business address. There was little independent evidence of this save and except for one sticker which the applicant claimed was a redirection sticker. There was no evidence of payment to the Post Office for the redirection nor of any authority given to the Post Office. I also note, that the some bills were sent to the subject property, such as the insurance on the property, but that is at best as consistent with it being a holiday home as it being her principal place of residence.
10. There was insurance held on the Valley Road property and the subject property. Bearing in mind the large value of the subject property, it would be unsurprising that there was insurance of that property. Further I note that the applicant is a businesswoman and an administrator, so it would be good practice for her to insure all properties.
11. Consideration (j) in Black's case is where the person eats, drinks and sleeps. In regard to these matters, I do not accept the applicant's evidence, that she slept at the subject property 3 times per week; I believe she slept at the subject property on the occasional weekday, some weekends and holiday periods. I do not need to find where she slept otherwise. She stated she slept at her children's place, while she may have spent some time sleeping at her different children's places, I find this unlikely. It is more likely that she spent time sleeping in the Valley Road property or some other property that was not disclosed.
12. In relation to eating and drinking, the highest the applicant put it was that she eats her breakfast and lunch at the subject property when she is there and has "takeaway" food. There was no supporting evidence in relation to these matters. I do not find in this case where the applicant eats, drinks and sleeps takes me very much further.
13. The final matter considered in Black's case is where the applicant entertains friends. The only evidence called of entertaining was that the applicant had her family to stay on occasions at the subject property. I have no doubt that the applicant did have her family stay at the subject property on occasions, particularly on the holiday period and some weekends. But this is consistent with the subject property being a holiday house rather than a principal place of residence. Otherwise there was no evidence of the applicant entertaining at all.
14. Given all these matters, I conclude that the subject property was not the applicant's principal place of residence during any of the relevant years.
15. The applicant has also submitted, that if she fails in relation to the exemption claimed pursuant to s.54 of the Act then she should succeed in relation to the exemption pursuant to s.56 of the Act. Section 56 of the Act requires that there be a temporary absence from the placed used as the applicant's principal place of residence. I have found that the subject property was never used as the applicant's principal place of residence. Having made that finding, it stands to reason that there could never have been a temporary absence from the subject property as the applicant's principal place of residence.
16. Therefore, I will affirm the decision of the respondent.

(Although this figure falls to 38L per day if March bills, which cover the Summer holiday period, are excluded.)