Zhang v Chief Commissioner of State Revenue

Texts Cited: None cited

Category: Principal judgment

Parties: Jack Gordon Zhang (Applicant)
Chief Commissioner of State Revenue (Respondent)

Representation: Counsel:
J Nixon (Respondent)
Solicitors:
Applicant (Self Represented)
Crown Solicitor (Respondent)

File Number(s): 2025/00479227

Publication restriction: Nil

REASONS FOR DECISION

1. These proceedings concern an application for review of an assessment of surcharge land tax made by the Chief Commissioner of State Revenue (“Commissioner”) for the year ending 31 December 2024 (“2025 land tax year”) in respect of a property located in Five Dock (“the property”). At all relevant times, the property was owned by Jack Zhang (“the landowner”) together with his wife.

2. On 20 October 2025, the Commissioner determined that the landowner was liable for surcharge land tax in respect of the property under section 5A of the Land Tax Act 1956 (NSW) (‘LTA’) for the 2025 land tax year (“the decision”).

3. For the reasons set out below I have decided that the correct and preferable decision is to affirm the decision of the Commissioner.

Material facts

4. The landowner is a citizen of New Zealand. He has a right of permanent residence in Australia. He owns various pieces of land in New South Wales. All of the relevant properties are owned with other landowners.

5. On 1 May 2023, the landowner received a letter from the Chief Commissioner in response to a request made for a refund of surcharge land tax in the years 2018, 2019, 2020, 2021 and 2022. A refund was granted in respect of payments of surcharge land tax after 1 July 2021. That letter included the following statement:

You will no longer be liable to surcharge land tax in respect of: [redacted].

6. The landowner asserts that he relied on that document and did not consider any potential limitations when it came to his travel in the 2025 land tax year.

7. The landowner was in Australia for 185 days in the 2025 land tax year.

8. On 6 March 2024, the landowner departed from Australia and travelled to China. He identified that he did so to obtain a criminal clearance certificate which he needed to finalise his application for Australian citizenship. He returned on 4 June 2024. The landowner was absent for 90 days on that occasion. If not for that travel, the landowner would have been present in Australia for 200 continuous days.

9. A criminal clearance certificate for the period 10 April 2018 to 11 March 2024 dated 15 March 2024 was included in the landowner’s evidence.

10. On 11 July 2024, the Department of Immigration informed the landowner by email that he was required to obtain a further criminal clearance certificate for the period 4 March 2024 to 4 June 2024 within 56 days of the date of that email.

11. On 6 August 2024, the landowner owner again departed from Australia and travelled to China. He asserted that the did so because he needed to obtain a further criminal clearance certificate for the period he was in China from March to June 2024 and so he needed to return. He returned to Australia from China on 30 October 2024. The landowner was absent for 85 days on that occasion. If not for that absence, the landowner would have been present in Australia for 200 continuous days.

12. A criminal clearance certificate for the period 1 March 2024 to 8 October 2024 dated 17 October 2024 was included in the landowners evidence.

13. There was no evidence as to what steps the landowner took in China to obtain the criminal clearance certificate, when he applied for that certificate on either occasion, or what the landowner did in China in the period 16 March 2024 to 4 June 2024 or in the periods 6 August 2024 to 16 October 2024 and 18 October 2024 to 30 October 2024 and why he needed to be in China in those periods.

14. On 26 January 2025, the landowner became an Australian citizen.

15. On 29 April 2025, the Chief Commissioner sent a letter to the landowner informing him that citizens from particular countries, including New Zealand, may be, as a result of the Treasury Laws Amendment (Foreign Investment) Act 2024 (Cth) liable for surcharge land tax from 8 April 2024.

16. On 29 April 2025, the Chief Commissioner issued an assessment notice for the 2025 land tax year to the landowner in the amount of $124,045.10 (“the Assessment”).

17. No interest or penalties were imposed in relation to the Assessment.

18. The landowner entered into a payment plan for the 2025 land tax liability on 12 June 2025.

19. On 6 July 2025, the landowner lodged an objection to the Assessment.

20. On 20 October 2025, the Chief Commissioner disallowed the objection and upheld the Assessment.

21. On 10 December 2025, the landowner lodged an application for review of the Assessment in the Tribunal.

Jurisdiction

22. Section 96(1)(a) of the Taxation Administration Act 1996 (NSW) (“TAA”) provides that a taxpayer can apply to the Civil and Administrative Tribunal for a review of the decision of the Chief Commissioner if the taxpayer is dissatisfied with the Chief Commissioner’s determination of the taxpayer’s objection.

23. As the decision to issue the Assessment has been the subject of an objection and the landowner is dissatisfied with the Chief Commissioner’s determination of that objection, the Tribunal has jurisdiction to review that decision.

24. It is the decision to issue the Assessment, not the decision on the objection to those assessments, which is the subject of the review: see Singh v Chief Commissioner of State Revenue [2016] NSWCATAD 9 at [10] - [13] and the authorities there cited. In conducting that review the Tribunal is required to determine the correct and preferable decision having regard to the materials before it and the applicable law: s 63 Administrative Decisions Review Act 1997 (“ADR Act”).

Landowner’s contentions

25. At the hearing the landowner acknowledged that he owned the property, that the property was “residential land” within the meaning of the Land Tax Act 1956 (NSW)(“LTA”), that he was a New Zealand citizen at the relevant date and accepted that he was a “foreign person” for the purposes of the LTA, for the reasons that he was not in Australia for 200 days or more in the 2025 land tax year.

26. At the hearing, the landowner contended that:

27. Revenue NSW informed the landowner that he did not have an obligation to pay surcharge land tax as a New Zealand citizen on 1 May 2023 and that he was entitled to rely on that notification unless and until he was informed otherwise by Revenue NSW.

28. Fairness in administration requires that Revenue NSW ought to inform taxpayers about changes in the law in circumstances where they have been informed that they do not have any land tax obligations.

29. this is a failure of procedural fairness because a taxpayer cannot comply with a law about which the taxpayer is unaware and the taxing agency is the body responsible for preventing the dissemination of relevant information about how to comply with the law.

30. The first occasion on which he became aware that he may be required to pay surcharge land tax was when he received the letter dated 29 April 2025 and received the Assessment.

31. The process described above was procedurally unfair and on that basis the Assessment is tainted and should be set aside.

32. That his absence from Australia on 6 March - 4 June 2024 and 6 August - 30 October 2024 were each a brief physical absence and were in exceptional circumstances within the meaning of section 5B(2B) of the LTA such that the Chief Commissioner has, and should have exercised, his discretion to waive the requirement of physical presence in Australia in section 5B(2A) of the LTA.

Chief Commissioner’s contentions

27. The Chief Commissioner accepted that the landowner was a permanent resident at the relevant taxing date.

28. The Chief Commissioner contended that given the concessions made by the landowner, there can be no serious contest concerning the correctness of the Assessment and the Tribunal is bound to find that the landowner is liable for surcharge land tax as assessed.

29. He also contended that the task of the Tribunal is one of “merits review” and not “judicial review” such that the Tribunal is not empowered to consider whether the assessment was duly made, but was bound by section 119(a) of the Taxation Administration Act 1996 (NSW) and that the Assessment was conclusive evidence of the due making of the Assessment.

30. The Chief Commissioner argued that he does not have any obligation to warn a taxpayer of a potential liability to taxation, nor does the Tribunal have any discretionary power to reject an assessment on the basis of unfairness and there can be no basis for an estoppel of the power and functions of the Chief Commissioner in making an assessment.

31. The Chief Commissioner argued that section 5B(2B) has two key issues that the Tribunal must determine: whether there are exceptional circumstances and whether the absence related to those circumstances was brief.

32. The Chief Commissioner conceded that the understanding of what is brief must be understood in the context of the exceptional circumstances and proposed that the wording of section 5B(2B) of the LTA required that the Tribunal apply a narrower test than that propounded in the decision of Nulty v Blue Star Group Pty Ltd [2011] FWAFB 975 (“Nulty”). He submitted that the Tribunal ought to conclude that the words “exceptional circumstances” in the context of section 5B(2B) of the LTA only include circumstances are those that are not at the instigation or choice of the taxpayer, but are a departure from Australia as a result of an “external supervening event”.

Surcharge land tax

33. Surcharge land tax was introduced by the State Revenue Legislation Amendment (Budget Measures) Act 2016 (NSW) commencing on 28 June 2016.

34. It is an annual tax based on the ownership of property held at the taxing date (being midnight on 31 December in any year) payable under the LTA on “residential land” owned by a “foreign person”: LTA, s 5A.

35. Section 104J(1) of the Duties Act 1997 (NSW) defines a "foreign person" as "a person who is a foreign person within the meaning of the Foreign Acquisitions and Takeovers Act 1975, of the Commonwealth as modified by this section". The modifications in that section are not relevant to the present application.

36. Section 4 of the Foreign Acquisitions and Takeovers Act 1975 (Cth) (“FATA”) states that a foreign person means "an individual not ordinarily resident in Australia". In relation to that definition, s 5 of FATA provides:

5 Meaning of ordinarily resident

(1) An individual who is not an Australian citizen is ordinarily resident in Australia at a particular time if and only if:

(a) the individual has actually been in Australia during 200 or more days in the period of 12 months immediately preceding that time; and

(b) at that time:

(i) the individual is in Australia and the individual's continued presence in Australia is not subject to any limitation as to time imposed by law; or

(ii) the individual is not in Australia but, immediately before the individual's most recent departure from Australia, the individual's continued presence in Australia was not subject to any limitation as to time imposed by law.

37. Section 5B of the LTA provides an exemption to surcharge land tax where the land is the principal place of residence of the landowner and the landowner is a permanent resident of Australia. It also includes a requirement that the residence be occupied for at least a continuous period of 200 days in each tax year and includes a requirement that the landowner be physically present in Australia for all of those days unless the Chief Commissioner exercises his discretion to waive that requirement if there are exceptional circumstances in which a person has had a brief physical absence from Australia.

38. In the present application there is the additional complication of international tax treaties. In 2009, New Zealand and Australia ratified a new tax treaty (“New Zealand DTA”). That agreement included an agreement that New Zealand nationals will not be subject to any taxation which is “more burdensome” that the taxation to which Australian nationals are subject: article 24(1) of [2010] ATS 10.

39. On 7 April 2024, s 3AAA(1) and 5(1) of the International Tax Agreements Act 1953 (“ITAA”) gave the New Zealand DTA the force of law.

40. On 8 April 2024, the ITAA was amended by the Treasury Law Amendments (Foreign Investment) Act 2024, which inserted section 5(3) in the ITAA. This section was understood by the High Court in G Global 120E T**2 Pty Ltd v Commissioner of State Revenue [2025] HCA 39 (at [18]) to mean that article 24(1) of the New Zealand DTA and other similar articles in other tax treaties only applied to “Australian tax” as defined in section 3(1) of the ITAA and did not apply to state taxation laws. Thus, from 8 April 2024, the ITAA no longer prevented the imposition of surcharge land tax on New Zealand nationals.

41. The landowner bears the onus of proof in respect of his application: s 100(3) of the TAA.

Consideration

42. Given the landowner’s concession that the majority of the requirements for the imposition of surcharge land tax have been met in this case, the remaining questions are whether the Chief Commissioner ought to have exercised his discretion under section 5B(2B) of the LTA to waive the requirement that a person be physically present in Australia for a period of 200 continuous days, and whether the Chief Commissioner is prevented from assessing a landowner to surcharge land tax in circumstances where he has failed to give notice to that landowner of any change in the landowner’s taxation obligations where the Chief Commissioner had indicated a contrary position in relation to previous tax years than the position that underlies the assessment at issue in the proceedings.

Waiver

43. Section 5B(1)-(3) of the LTA states:

(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.

(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.

(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.

44. There is no question in these proceedings that the landowner satisfied section 5B(1) of the LTA for the 2025 land tax year.

45. Nor is it in question that the landowner does not satisfy section 5B(2) because of the operation of section 5B(2A) of the LTA. There has been no waiver of the requirement in subsection (2A) by the Chief Commissioner.

46. The Chief Commissioner submitted that the Tribunal stands in the shoes of the Chief Commissioner and thus can exercise the discretion to waive the requirement in section 5B(2A) if satisfied that the physical absence of the landowner from Australia was brief and occurred in exceptional circumstances.

Exceptional circumstances

47. The term “exceptional circumstances” is not defined in the LTA.

48. Sections 5B(2A) and (2B) were introduced into the LTA on 19 May 2022 by the State Revenue and Fines Legislation Amendment (Miscellaneous) Act 2022 (NSW)(“Amending Act”).

49. The Second Reading Speech in the Legislative Council for the Amending Act relevantly states:

The exemption applies to permanent residents in respect of residential land that they “use and occupy” as their principal place of residence for a continuous period of 200 days in the land tax year. This is called the “residence requirement”.

The meaning of the words “use and occupy” has become subject to dispute in recent years, with some taxpayers arguing that it does not require a close physical connection to the property for the 200 days. IN one case, a permanent resident was only in Australia for less than half a year due to work yet maintained that the property was their principal place of residence. This uncertainty poses a revenue risk.

The amendments clarify the exemption so as to require that the permanent resident be physically present in Australia for the 200 day period, except in limited circumstances where a brief period of absence may be permitted at the discretion of the Chief Commissioner, such as attending a funeral overseas. The Chief Commissioner will issue guidelines outlining the types of limited circumstances where an absence may be allowed.

50. Practice Note CPN 039 titled “Surcharge Land Tax, Sections 5A and 5B of the Land Tax Act 1956 – Principal Place of Residence” was issued on 6 March 2026. It provides guidance on what circumstances may be “exceptional”. These include attending a funeral, to assist with the care of a sick or dying relative, or to attend the marriage of an immediate family member or other circumstances on a case by case basis. It was not in place at the relevant time, however, does give some guidance as to the likely opinion of the Chief Commissioner at the time of the Assessment and the Decision.

51. The Chief Commissioner referred the Tribunal to the decision of the Full Bench of Fair Work Australia (as it then was, now the Fair Work Commission) in Nulty.

52. The Full Bench in that decision were considering the meaning of the words “exceptional circumstances” as used by Parliament in section 366(2) of the Fair Work Act 2009 (Cth), which provides for a discretionary extension of time to lodge an application under section 365 of the FW Act for a review of a decision to terminate her employment.

53. Having considered the decision of Rares J in Ho v Professional Services Review Committee No 295 [2007] FCA 388 and the High Court authorities referred to therein, the Full Bench concluded (at [13]):

“[13] In summary, the expression “exceptional circumstances” has its ordinary meaning and requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe “exceptional circumstances” as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural “circumstances” as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of “exceptional circumstances” includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.”

54. There is nothing in the above that suggests that the meaning of exceptional circumstances should be narrowed only to the existence of an external supervening event outside the landowner’s control in order to be an exceptional circumstance. Nor is there anything in the second reading speech, or the language of section 5B(2B) that requires such a limitation on the meaning of the expression and the Tribunal does not propose to adopt such a limitation.

55. Rather, the Tribunal considers that the meaning attributed to the words “exceptional circumstances” by Full Bench in Nulty is consistent with its use in section (2B)(5B) of the LTA.

56. The landowner relies on the requirement to attend China in person to obtain the criminal clearance certificate as the exceptional circumstance said to justify the absence from Australia.

57. The Chief Commissioner submitted that the Tribunal should accept that the decision to obtain Australian citizenship and to comply with the associated requirements thereof is a personal decision made by the landowner and could not therefore satisfy the meaning of exceptional circumstances. The Tribunal does not agree. A citizenship application is an occurrence that is out of the ordinary and uncommon and the Tribunal accepts that the requirement to obtain a criminal clearance certificate in order to complete a citizenship application could be an exceptional circumstance within the meaning of that expression.

58. However, the Tribunal accepts that the phrase exceptional circumstances must be understood in its context. In section 5B of the LTA the context requires the exceptional circumstances to be that which interrupts a continuous physical presence in Australia for a period of 200 days.

59. There is some evidence that there was a time limit on the requirement to obtain the criminal clearance certificate in respect of the second visit to China, although there is no evidence on the effect that a failure to provide that evidence within that time frame would have on the status of the application or the likelihood of its success, and no evidence as to any requirement of that kind in relation to the visit which occurred in the period March to August 2024.

60. Without any evidence that suggests that the attendance in China to obtain the criminal clearance certificate was required prior to a particular date or within a certain period of time and of the consequences of failing to obtain that certificate within the period of time, the Tribunal does not consider that there was a pressing need or obligation to obtain that certificate prior to the completion of a continuous 200 day period of physical presence in Australia that would make the physical absence of the landowner in the period 4 March 2024 to 4 June 2024 an exceptional circumstance within the meaning of section 5B(2B) of the LTA.

61. The second trip to China was to obtain a criminal clearance certificate for the period spent in China after obtaining the first criminal clearance certificate. Without evidence that there was some exceptional reason why the landowner remained in China after the criminal clearance certificate was issued giving rise to the need to obtain a further criminal clearance certificate for that period, the Tribunal is not satisfied that the travel to China in the period 6 August 2024 to 30 October 2024 was an exceptional circumstances within the meaning of that expression in the context of section 5B(2B) of the LTA even though the Tribunal accepts that the certificate was to be provided within 56 days of 11 July 2024, as required by the Department of Immigration in its correspondence of that same date.

62. The Tribunal is not satisfied that either of the landowner’s absences from Australia in the year ending 31 December 2024 were an exceptional circumstance within the meaning of that expression in section 5B(2B) of the LTA.

63. Given this finding, the Tribunal cannot exercise the discretion in section 5B(2B) to waive the requirement of physical presence in Australia for 200 continuous days in section 5B(2A) of the LTA.

Brief absence

64. While the Tribunal accepts that section 5B(2B) of the LTA requires the landowner’s absence to be both an exceptional circumstance and brief, and thus there is no need to determine whether the landowner’s absence from Australia was brief, the Tribunal will consider whether the absence of the landowner was brief.

65. As stated, the landowner’s absence from Australia was for a period of 91 days in the first absence and 85 days in the second absence.

66. The meaning of brief in the context of section 5B(2B) has been considered by the Tribunal in the decisions of Chen v Chief Commissioner of State Revenue [2025] NSWCATAD 189 (“Chen”) and Fleuren v Chief Commissioner of State Revenue [2024] NSWCATAD 177 (“Fleuren”). In both those decisions the Tribunal determined that the meaning of brief was to be measured against the “benchmark of the 200-day period” set out in section 5B(2): Chen at [36] (see also Fleuren at [40]).

67. While each absence was less than half of the 200-day continuous period, the Tribunal is not satisfied that either period was “brief” within the contextualised meaning of that term.

68. On the basis of the above, the landowner has not established that the discretion in section 5B(2B) should be exercised to waive the requirement that he be physically present in Australia for 200 continuous days in the 2025 land tax year.

Conduct of the Chief Commissioner

69. Carefully considered, there are two elements of the conduct of the Chief Commissioner that have attracted criticism from the landowner in this case that he says ought to disentitle the Chief Commissioner from imposing land tax on the landowner in the 2025 land tax year.

70. The first is essentially an argument that the Chief Commissioner is estopped from levying land tax in circumstances where a taxpayer has been informed that they do not have a liability for land tax as at 1 May 2023.

71. In relation to the allegation that the conduct of the Chief Commissioner or those acting on his behalf in failing to send any communication to the landowner indicating that he may be liable for land tax following the introduction of the Treasury Law Amendments (Foreign Investment) Act 2024, somehow invalidated the assessment, the law is clear: no conduct or representation by or on behalf of the Chief Commissioner will be regarded at law as constituting an estoppel; such as to prevent the Chief Commissioner from issuing an assessment in the course of carrying out his functions and duties in administering the revenue laws of New South Wales: BBLT Pty Ltd v Chief Commissioner of State Revenue [2003] NSWSC 1003 at [111]; Gunasti v Chief Commissioner of State Revenue [2012] NSWADT 218 at [19].

72. The Tribunal was not taken to any legislation or legal principle and no evidence was provided to the Tribunal that would support any finding or conclusion that there is a duty on the Chief Commissioner to give notice prior to the effect of changes in the law to affected taxpayers. This lack of evidence is consistent with the authorities which confirm that there is no duty on the Chief Commissioner to inform a taxpayer of their potential liability to taxation: Wang v Chief Commissioner of State Revenue [2023] NSWCATAD 1 at [35]; Denton v Chief Commissioner of State Revenue [2024] NSWCATAD 206 at [74].

73. It is a well-established principle that being unaware of the terms or application of the law does not excuse a failure to comply with it: Downs v Chief Commissioner of State Revenue [2002] NSWADT 51 at [26]. The absence of any notice to the landowner directly or by way of any website, publication or circular of the changes to his taxation obligations following the amendments to the ITAA noted above, does not invalidate the decision of the Chief Commissioner.

Procedural or other unfairness

74. The second question of the conduct of the Commissioner relates to whether the Commissioner ought to have notified the landowner of the possibility of the imposition of land tax and whether the failure to do so was an unfairness that the Tribunal could remedy.

75. The question of whether any question of unfairness or delay might give rise to a power of the Tribunal to exempt a taxpayer from their taxation obligations was considered in Sjarifudin v Chief Commissioner of State Revenue [2021] NSWCATAD 347 at [46], where it was held that there is no legislative provision or authority which gives the Chief Commissioner or the Tribunal a discretionary power to exempt a taxpayer from surcharge land tax if the statutory criteria for imposing the tax are met.

76. The Tribunal is a forum which derives all of its power from statutes. Arguments based on notions of “fairness” or “justice” cannot succeed in the absence of any foundation in the legislation: Commissioner of Taxation v Ryan (2000) 201 CLR 109 at 123.

77. Nor do arguments as to fairness find a place in the administrative review of an assessment: E-Synergies.Com Pty Ltd v Chief Commissioner of State Revenue [2026] NSWCATAP 103 at [55] (“E-Synergies*.Com”*) and Agrinova Pty Ltd v Chief Commissioner of State Revenue [2025] NSWCATAP 86 at [44] and the cases cited therein.

78. Further, as asserted by the Chief Commissioner, in administrative review proceedings the validity of an assessment is not open to question (TAA s 16) and notices of assessment are conclusive evidence of the due making of the Assessment (TAA s 119(a)): E-Synergies.Com at [56]. The Tribunal is not empowered to go behind the Assessment, except to consider the particulars of the Assessment and the amount so assessed: section 119(b) of the TAA.

Conclusion

79. On the basis of the above, considerations of whether the landowner relied on the correspondence of 1 May 2023 as a guarantee against any future land tax liability or whether the Commissioner could have notified the landowner of his liability at an earlier time are not relevant to the question as to whether the Commissioner has appropriately issued surcharge land tax assessments.

80. I find that given that the landowner has conceded that the statutory criteria for the imposition of surcharge land tax in the LTA has been met and no exemption to that obligation has been identified and there is no other statutory power available to the Tribunal to exempt the landowner from surcharge land tax on the basis of procedural or other unfairness, there is no basis to set aside the Assessment.

Orders

81. I make the following orders:

82. The Chief Commissioner’s decision under review is affirmed.

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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