The reassessment of land tax for the 2021 land tax year, made by the respondent on 6 March 2023 (assessment no. 43120419), is confirmed.

Note: This is an edited version of the oral reasons provided at the conclusion of the hearing, with minor edits to improve the expression in written form.

1. This proceeding concerns a land tax assessment for the 2021 land tax year issued by the Commissioner of State Revenue ('Commissioner') to Mr Prashant Sharma in respect of a property he used to own in Bentleigh ('Relevant Property').
2. Mr Sharma, and his former partner lived in that property as their principal place of residence ('PPR') between late 2014 (the time it was acquired) until mid-2019 when they moved to a rental property in Keilor Downs ('Rental Property') to be closer to family as they were expecting their first child.
3. At all relevant times between mid-2019 and February 2021, Mr Sharma lived at the Rental Property and rented out the Relevant Property to third party tenants. For various reasons, Mr Sharma ended up selling the Relevant Property in around March or April 2021.
4. A property used and occupied as a person's PPR in the six months preceding a given land tax year (i.e. between July and December 2020 for the 2021 land tax year) is exempt from land tax under section 54 of the Land Tax Act 2005 (Vic) ('LT Act').
5. It is not disputed that Mr Sharma did not use and occupy the Relevant Property as his PPR at any time during 2020 given that he was living in the Rental Property over that period and the Relevant Property was rented to tenants. It follows that he did not satisfy the requirements of section 54.
6. The LT Act also includes a provision allowing for a person to continue to claim the PPR exemption where the person is temporarily absent from the property, subject to certain conditions.[1] Relevantly, one of the conditions - set out in section 56(5) of the LT Act (as it was for relevant period) - is that the person has not rented out the property for six months or more in the preceding calendar year (i.e. during the 2020 calendar year in respect of land tax for 2021).
7. It is not disputed that Mr Sharma rented out the Relevant Property for the whole of the 2020 calendar year, such that Mr Sharma fails the condition set out in section 56(5) of the LT Act on a plain reading.
8. However, Mr Sharma essentially contends that, notwithstanding the foregoing matters, the Relevant Property ought to be exempt on the basis that he had attempted to return to the Relevant Property from March 2020, and would have done so if it were not for the state government's COVID-19 related restrictions under the Residential Tenancies Act 1997 (Vic) and the refusal of the tenants to voluntarily terminate the tenancy early.
9. The COVID-19 related restrictions were imposed under the COVID-19 Omnibus (Emergency Measures) Act 2020 (Vic) and limited the circumstances in which landlords could evict tenants during the height of the pandemic.
10. The material produced by Mr Sharma and included in the Tribunal Book includes emails between Mr Sharma and a real estate agent concerning the early termination of the lease of the Relevant Property. While there was some suggestion in those emails that Mr Sharma was seeking to terminate the lease early in order to enable the sale of the property (rather than to resume its occupation), Mr Sharma gave evidence that his intention was to return to the Relevant Property and he had mentioned a sale because he understood from a friend that this would make it easier to deal with the termination of the lease over the Rental Property and to bring about the termination of lease in respect of the Relevant Property.

(For completeness, I add that Mr Sharma confirmed he did not end up making any application to VCAT to bring about the termination of the lease of the Relevant Property.)

1. At the commencement of the hearing, I explained the role of the Tribunal on review of a tax assessment is to make the correct or preferable decision.[2] In Motticant Pty Ltd v Commissioner of State Revenue,[3] I explained what this means, namely that:

If only one decision is available on the application of the law to the relevant facts, then that will be the correct decision; however, if the legislation under review provides a discretion, a tribunal must make the decision that is preferable among the possible decisions available.

1. The Commissioner submits there is no discretion in the LT Act for the Commissioner, or the Tribunal on review, to vary the operation of either section 54 or section 56.[4] I agree. This is highlighted by comparing those sections with section 57 of the LT Act, which expressly confers a discretion on the Commissioner (which the Tribunal could re-exercise on review) to allow the PPR exemption to remain in place for more than three years after a person's death.
2. The Commissioner submits that, while he has some discretion about whether (or not) to assess a person to tax under the Taxation Administration Act 1997 (Vic) ('TA Act'), for the reasons identified in Pitard and Others v Commissioner of State Revenue,[5] the Tribunal cannot exercise any such discretion on review.[6] Again, I agree and note that this was also confirmed in Wilkinson v Commissioner of State Revenue,[7] in the context of the Commissioner's discretion to withdraw an assessment under the TA Act.
3. It follows that the correct decision is that the Relevant Property was not exempt from land tax for the 2021 land tax year.
4. Mr Sharma did not object to the penalty tax which has been imposed at a rate of 20%, reflecting voluntary disclosure after the commencement of the Commissioner's investigation. Neither he did seek to advance any argument for the remission of that penalty tax. In any event, having regard to the Commissioner's submissions,[8] I accept that the penalty tax has been correctly imposed in accordance with the TA Act and there is no basis for remission which has been made out.
5. For these reasons, I will confirm the reassessment.

[1] Although this section was not raised in Mr Sharma's objection, I granted leave for him to rely on this ground under section 109 of the Taxation Administration Act 1997 (Vic).

[2] Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577.

[3] [2017] VCAT 1820 [9].

[4] Respondent's Legal Contentions dated 26 June 2024 ('RLC') [32], [34] and [38].

[5] [2019] VCAT 1074 at [40]- [85].

[7] [2024] VCAT 807.