Zhao v Chief Commissioner of State Revenue

Category: Principal judgment

Parties: Minxiang Zhao (Applicant)
Chief Commissioner of State Revenue (Respondent)

Representation: Counsel:
I Sethi (Applicant)
D Mitchell (Respondent)
Solicitors:
Ms Zhao as Agent (Applicant)
Crown Solicitor’s Office (Respondent)

File Number(s): 2025/00390305

Publication restriction: None

REASONS FOR DECISION

1. The Applicant, Mr Zhao, filed a review of the decisions of the Chief Commissioner of State Revenue assessing him as liable to pay land tax and surcharge land tax for the 2020 to 2025 tax years. The Property the subject of the assessment is located in Sydney and was owned by him at the relevant times.

2. The Applicant says that he is entitled to the principal place of residence exemption under section 10(1)(r) of the Land Tax Management Act 1956 (NSW). The Applicant also says that there were exceptional circumstances for his absence from Australia so that the exemption in section 5B of the Land Tax Act 1956 (NSW) (Land Tax Act) applies to the Applicant.

3. Mr Zhao’s daughter is Ms Zhao, who resides in Australia was previously given leave by the Tribunal to act as his agent, was present for the hearing, and instructed Counsel who appeared for Mr Zhao.

4. Documents filed by the parties and relied upon for the hearing are:

5. Administrative Review Application filed 10 October 2025;

6. Documents filed pursuant to section 58 of the Administrative Decisions Review Act 1997 (NSW) filed 10 November 2025;

7. Applicant’s Written Submissions filed 3 March 2026;

8. Witness Statement of the Applicant filed 3 March 2026;

9. Applicant’s Evidence Bundle filed 3 March 2026;

10. Applicant’s Further Evidence sent to the Tribunal via email 10 April 2026;

11. Respondent’s Submissions filed 1 May 2026;

12. Affidavit of Ruoshi (Lance) Zhang (solicitor) filed 1 May 2026;

13. Exhibit RLZ-1 filed 1 May 2026 (comprising a selection of the documents produced under summons and relevant documents from the Applicant);

14. Witness Statement in Reply of the Applicant filed 30 April 2026;

15. Witness Statement in Reply by the Applicant dated 14 May 2026 filed in the hearing 18 May 2026;

16. Applicant’s Outline of Submissions in Reply dated 14 May 2026 filed in the hearing 18 May 2026;

17. Witness Statement of the Applicant dated 17 May 2026 filed in the hearing 18 May 2026.

18. Mr Zhao was not present for the hearing. Counsel appearing for the Applicant requested that the material filed by the Applicant be considered and was relied upon for the hearing. Previous directions were made for the Applicant to appear in person on the hearing date. It was submitted that the Applicant was unavailable to attend the hearing due to his work commitments in China and thus could not be cross examined in person on his evidence, and it was also submitted he was unavailable because he was recently booked to undergo an exploratory medical procedure on the hearing date. The payment receipt identifying the procedure was provided at the commencement of the hearing. There is no admissible expert medical opinion provided as to the desirability or necessity of such procedure.

19. There was no medical certificate or report and the receipt for payment was inadequate to explain the Applicant’s necessity to undertake a medical procedure on the hearing date. The Tribunal referred the parties to the substance of Justice Barrett’s decision concerning inadequate medical documentation in this circumstance: see Magjarraj v Asteron Life Limited [2009] NSWSC 1433, especially at paragraphs [22]-[23].

20. The Witness Statement of the Applicant dated 17 May 2026 (which was marked as Exhibit 13) made at a time when he knew he was booked for the procedure, stated that:

“…I wish to formally and respectfully ask the Tribunal proceed [sic] to consider my application by reliance on the material I have provided including my three (3) previous sworn witness statements, together with this (1) statement when making its final decision.”

8. The Respondent submitted that the Applicant’s absence and unavailability for cross examination prejudiced the Respondent and primarily the Tribunal should reject the evidence of the Applicant and only permit reliance upon the exhibited documentary evidence. It was submitted secondly in the alternative, that the Tribunal should reject the evidence and treat the material filed as submissions. Thirdly, it was submitted as an alternative to the earlier submissions that the material filed by the Applicant should be given little weight if accepted into evidence.

9. The Tribunal proceeded on the basis that the Applicant’s evidence would be given limited weight, subject to it being identified as relevant.

10. The Applicant’s Counsel submitted at the conclusion of the hearing that some of the propositions submitted by Counsel for the Respondent in his oral submissions were to the Applicant’s disadvantage and were untested inferences. This is in part because the Applicant was not made available to be tested on his statements and respond to the documents from which inferences could be drawn. However, the Applicant did address the evidence of the Respondent in his written statements and “in reply” (as referred to in Exhibits 10 and 11 the latter was dated 14 May and filed during the hearing) and sought to refute or explain those matters raised against him, by responding in his statements.

11. The modern view of the rule in Browne v Dunn (1894) 6 R 67 (to which the contention in the previous paragraph is taken to be making reference) has been explained by the Court of Appeal in NU v NSW Secretary of Family and Community Services [2017] NSWCA 221, per Beazley P (McColl JA and Schmidt J agreeing) at [57]-[61]:

“[57] It is also well established that a finding made in the absence of cross-examination may involve a denial of procedural fairness: see rule in Browne v Dunn. The meaning of the rule in Browne v Dunn was explained by Hunt J in Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation (1983) 1 NSWLR 1 at 16:

‘It has in my experience always been a rule of professional practice that, unless notice has already clearly been given of the cross-examiner’s intention to rely upon such matters, it is necessary to put to an opponent’s witness in cross-examination the nature of the case upon which it is proposed to rely in contradiction of his evidence, particularly where that case relies upon inferences to be drawn from other evidence in the proceedings. Such a rule of practice is necessary both to give the witness the opportunity to deal with that other evidence, or the inferences to be drawn from it, and to allow the other party the opportunity to call evidence either to corroborate that explanation or to contradict the inference sought to be drawn. That rule of practice follows from what I have always believed to be rules of conduct which are essential to fair play at the trial and which are generally regarded as being established by the decision of the House of Lords in Browne v Dunn (1894) 6 R 67.’

[58] There is a clear corollary of the rule, namely, that if a witness is on notice of the allegation upon which a party intends to rely and is on notice that his or her evidence is contested on that issue, the rule does not mandate that the witness be cross-examined on the matter. This was explained in Browne v Dunn by Lord Herschell LC at 71, who pointed out that there was no obligation to raise such a matter where it is:

‘… perfectly clear that [the witness] has had full notice beforehand that there is an intention to impeach the credibility of the story which he is telling … All I am saying is that it will not do to impeach the credibility of a witness upon a matter on which he has not had any opportunity of giving an explanation by reason of there having been no suggestion whatever in the course of the case that his story is not accepted.’

See also West v Mead [2003] NSWSC 161 per Campbell J at [94]-[97].

[59] There is another aspect of fact finding which is presently relevant. A failure to cross-examine on an issue does not require the fact finder to accept the witness’ evidence. In Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234 the Court (Campbell JA, Allsop P and Basten JA agreeing) stated, at [105]:

‘While the evidence was not cross-examined on, that does not necessarily mean that the judge was obliged to accept it. A judge can reject evidence that has not been cross-examined on if, for example, it was inconsistent with other evidence that he accepted, or if it was inherently incredible.’ (citations omitted)

[60] In Bradley v Matloob [2015] NSWCA 239, McColl JA, at [7], further explained that there was no requirement to accept the evidence of a witness where, for example, the evidence is:

‘… inherently illogical or unreliable, or where the opposing party calls evidence of a substantial nature directly contradicting the evidence on which there was no cross-examination …’

[61] However, as her Honour also observed:

‘… in many cases it would be wrong, unreasonable or even perverse to reject evidence upon which there has been no relevant cross-examination.’

See also RCR Tomlinson Ltd v Russell [2015] WASCA 154 at [70].”

12. The initial decision was made by the Chief Commissioner of State Revenue (Chief Commissioner) on 18 September 2024 for the years 2020 to 2024, and on 20 January 2025 for the 2025 tax year.

13. The Applicant objected to the decisions on 4 February 2025. The Chief Commissioner disallowed the objection on 19 June 2025 on the basis that the Applicant had not established that he resided at the Property as his principal place of residence, and because the Applicant had spent less than 200 days in Australia in the 12 month period preceding each taxing date.

14. The Property is a three or four bedroom freestanding house located in Sydney. The Property was purchased by contract dated 21 May 2013 with completion due by about July 2013. The documents produced by the Mortgagor record that the Applicant was looking to purchase the Property as an investment Property. The Applicant took out an interest only loan.

15. The Applicant produced Commonwealth Bank statements referred to in paragraph [3] of his Statement in Reply dated 30 April 2026 at and during the course of the hearing of this application. They were not annexed to his witness statement even though they were said to be annexed. There is recorded in the Applicant’s bank statements produced from the Commonwealth Bank an entry dated 7 September 2019 which identifies a transfer from a nominated person as “rent”. The Applicant submitted that the Property was not leased. There is no explanation offered in the Statements of the Applicant for this deposit.

16. There are also debits from that account for local Australian businesses during times when the Applicant was not present in Australia.

17. There are also regular credits shown to that account from another Commonwealth Bank account and significant deposits from cash cheques. In 2022 there is a $20,000 deposit from the account of a Ms Wang. There is also a similar deposit from Ms Zhao in 2023. There is also a significant deposit from the Applicant in the sum of $73,990 on 11 April 2023 and the same amount credited from Fu Zhi Quan the next month in 2023. The Applicant deposited to that account $71,990 on 1 February 2024 and there was a cash cheque deposited in the sum of $203,600 on 26 February 2024. A further cash cheque in the sum of $189,400 was deposited on 29 February 2024. There is a further $100,000 deposited from Ms Wang on 27 February 2024. The Applicant’s former wife from whom he divorced in 2012 is also known by the name of Wang. An amount of $150,000 was transferred from an unspecified account on 10 February 2025 described as stamp duty naming the Property. Ms Zhao transferred $60,000 on 5 March 2025 described as “pay loan”. A total of $100,000 was transferred into the Applicant’s account and then transferred to Ms Zhao on the same day 6 October 2025. On 4 November 2025 an amount was transferred into the account and then transferred to the account of the Counsel appearing for the Applicant. The Commonwealth Bank account statements from which those amounts were transferred is not in evidence. The Applicant has not explained in his statements these credits to his bank account and has not disclosed other bank accounts despite these being requested by the solicitor for the Respondent.

18. The Applicant is a Chinese citizen who from the period of 1 July 2019 to 30 June 2025 also held permanent residency status in Australia. The Applicant has disclosed that he is the permanent full-time General Manager/Managing Director for a company based in China. The Chinese company searches record the Applicant as holding 34% of the total shareholding in the company which is the largest single shareholding. The Applicant is recorded as the company’s legal representative. The company had 181 employees in 2024 according to the company searches. The Applicant is also recorded as being a 35% shareholder and the company supervisor of another company located and presumably operating in the same part of China because of the name which refers to the city.

19. The Applicant consistently refers to his work in China as being in “my business”.

20. The Applicant’s company, which is named as a manufacturing company, provided an apartment in the city in which it is located for the Applicant to live in from 19 January 2015 to at least 16 June 2025. This is said to be Unit [apartment number] at a numbered Street address in the [City] in the letter provided from the company dated 16 June 2025. The colour photos of the Applicant’s dormitory accommodation which he says is provided without cost to him, annexed to the Statement dated 17 May 2026, bears no unit identifying number. The provided agreement in relation to occupying the dormitory accommodation does not specify that it is compulsory for the Applicant to stay there.

21. The Applicant’s mother also lived in that same city until her death on 16 August 2023 and it is accepted that the Applicant had family responsibilities in that city prior to her death. The Applicant has provided evidence that his mother was diagnosed with an aggressive tongue cancer in 2018. In the application for finance from Westpac in 2013 the Applicant disclosed his current address where he lived since 1 August 2009. This is a different address to the dormitory address. It is also a different address to that of his deceased mother. The residential status is declared on that loan application and he describes his residential status in that document as “own outright”. In the section of the application where assets are disclosed it is recorded that his Property assets have a total market value of $1,110,000 and his cash assets are $1,819,265. There are no liabilities recorded. Those disclosed values by inference are referring to assets located in China. The Applicant has been working with his company since 1 August 2002 according to the application for finance. It is likely the Applicant spent time with his mother prior to her death and may have stayed in her home with her to support her. The Applicant has not provided sufficient detail in relation to these different addresses to make the definitive conclusion as the Applicant invites the Tribunal to make. The documentary evidence does not support the Applicant’s contentions and raises significant doubts about where he actually lived in China.

22. In addition, the company searches indicate that the Applicant is a key person in the company and the business is likely to operate until 31 December 2099. In 2013 the company disclosed in a letter that the Applicant had been working with the company since August 2002 and his gross annual salary was RMB 1,855,000 and after-tax his monthly income is RMB 99,864. The translator in the documents required by Westpac based upon those disclosed salary amounts in the letter, converted those amounts in 2013 to $274,300 annually and the monthly amount of $14,433.

23. The Applicant visited Australia and the Property the subject of assessment after he purchased it and occupied the Property at least for some of those periods of time. The Respondent contends that the Applicant did not use the Property as his principal place of residence during the relevant period, and further, did not do so at any time.

24. The Applicant contends that his physical absence from Australia is not determinative, and the question whether the Property was his principal place of residence is not resolved by counting the days of occupancy. The Applicant submits that an evaluative assessment of the nature, quality and permanence of the Applicant’s connection to the Property leads to the conclusion that it was his principal place of residence.

25. The documents produced by the Department of Home Affairs, however, show that the Applicant spent limited time in Australia as follows:

(a) 1 January 2013 to 25 February 2013, being 56 days; (b) 16 December 2013 to 8 February 2014, being 55 days; (c) 27 September 2014 to 25 October 2014, being 29 days; (d) 17 January 2015 to 7 March 2015, being 50 days; (e) 12 September 2015 to 8 November 2015, being 58 days; (f) 30 January 2016 to 20 March 2016, being 51 days; (g) 8 October 2016 to 6 November 2016, being 30 days; (h) 10 February 2017 to 19 March 2017, being 38 days; (i) 9 September 2017 to 22 October 2017, being 44 days; (j) 9 September 2017 to 22 October 2017, being 44 days; (k) 7 October 2018 to 25 November 2018, being 50 days; (l) 17 February 2019 to 29 March 2019, being 41 days; (m) 22 April 2019 to 26 April 2019, being five days; (n) 31 August 2019 to 25 October 2019, being 56 days; (o) zero dates in the 2020 calendar year; (p) 5 March 2021 two 9 May 2021, being 66 days; (q) 16 November 2022 to 21 February 2023, being 98 days; (r) 20 January 2024 two 15 March 2024, being 55 days; (s) 19 December 2024 to 6 February 2025, being 50 days; (t) 7 August 2025 to 31 August 2025, being 25 days; (u) 4 September 2025 to 19 September 2025, being 16 days.

26. Those records lead to the following totals for each calendar year:

(a) 72 days in the 2013 calendar year; (b) 68 days in the 2014 calendar year; (c) 108 days for the 2015 calendar year; (d) 81 days for the 2016 calendar year; (e) 82 days for the 2017 calendar year; (f) 94 days for the 2018 calendar year; (g) 102 days for the 2019 calendar year; (h) zero days for the 2020 calendar year; (i) 46 days for the 2022 calendar year; (j) 52 days for the 2023 calendar year; (k) 69 days for the 2024 calendar year; (l) 78 days for the 2025 calendar year.

27. The longest period of time was 108 days which is well under 6 months. There was no period of continuous occupation for 6 months.

28. The incoming passenger cards, copies of which form part of the exhibits, identified China as the place in which the Applicant resides. The contact phone numbers are China based numbers except for Ms Zhao’s phone number. The Applicant submits that those passenger cards occur in a different context and are not determinative of the principal place of residence. That is undoubtedly correct because he could have just as easily put down any other address at which he intended to stay and that would not necessarily have been his principal place of residence. The applicable context is identifying for the authorities where the Applicant is going be located in Australia and the purpose of his visits.

29. The Applicant submitted Visa applications to the Australian authorities copies of which form part of the exhibited documents. The Applicant stated his intended address in Australia was the Property but also recorded the purpose of his visits, consistent with the visitor cards:

(a) in 2018 it is recorded: “My daughter who is an Australian citizen lives in Australia. I am doing business in China by visiting my daughter a few times a year. She is my only chid (sic) and I love to see her when I have time.” (b) In 2020 it is recorded: “My business is currently in China and I’m the company director, I need to visit my family in Australia and look after my company in China at the same time for at least another five years before retire” and “My daughter is living in Australia with her fiancé. She is Australian citizen and getting married this year in Sydney. I always come visit my daughter at least twice a year, and this time is for her wedding. The wedding is postponed to Jan 2021 due to COVID 19 and I really want to attend her wedding or at least visit her” and “My business is in China and I’m the company director. I’m not retired yet therefore I still have to travel to visit family and look after my company.” (c) In 2021 it is recorded: “I run my own business in China and not yet retired. My daughter is an Australian citizen who lives in Sydney with my wife and son-in-law. I travel back and forth to visit family and run my business at the same time.” (d) In 2022 it is recorded: “I have a daughter (only child) who is an Australian citizen living in Australia. Now I have a grandchild that I am desperately wanting to visit for the first time.” (e) In 2023 it is recorded: “I have a daughter who lives in Sydney, Australia with my son-in-law and my granddaughter. Three of them are Australian citizens. My daughter and my son-in-law both working in Australia.” (f) In 2024 it is recorded: “My family including my daughter, granddaughter and son-in-law are Australian citizens and live in Sydney, Australia. I visit them twice a year.”

30. The Applicant submits that the evidence shows that his fixed residential base in Australia was the Property, and that each time he travelled to Australia, he resided at that Property and nowhere else. The Applicant submits that he maintained the Property for his own use and not for investment purposes. The Applicant maintained utilities and furnishings, and stored his possessions, including personal and domestic belongings at the Property. It is further submitted on his behalf that the pattern of use and occupation of the Property was not consistent with a transient, or contingent connection. The Applicant submits that on the totality of the evidence before the Tribunal it is established that the ’’Applicant’s principal place of residence in the relevant periods was at the Property.

31. The Property was transferred to the Applicant’s daughter, Ms Zhou, in January 2025. The Applicant currently resides in China.

Legal provisions

32. The Applicant has the onus of proving the Applicant’s case in an application for review: Civil and Administrative Tribunal Act 2013 (NSW), section 30; Administrative Decisions Review Act 1997 (NSW) (ADR Act), sections 7, 8 and 9; Taxation Administration Act 1996 (NSW), sections 96 and 100(3). The Applicant submitted:

“Although it is not disputed that the onus remains on the Applicant to establish that his home at the [suburb] Property was indeed his principal place of residence in each of the land tax years in the Relevant Period, it is submitted and well-established that where he slept for the entirety of that time is not the exclusive indicator of a principal place of residence: Siino (sic) [Ziino] and Commissioner of State Revenue [2004] VCAT 1707.”

33. The role of the Tribunal on administrative review is to sit in the shoes of the administrator (in this case the Respondent) and determine afresh the correct and preferable decision having regard to the applicable law and the relevant factual material before it: ADR Act, section 63.

34. For the 2020 to 2025 tax years, section 10(1)(r) of the Land Tax Management Act 1956 (NSW) provided (relevantly):

(1) Except where otherwise expressly provided in this Act the following lands shall ... be exempted from taxation under this Act-

……

(r) land that is exempt from taxation under the principal place of residence exemption, as provided for in Schedule 1A.

35. Schedule 1A of the Land Tax Management Act 1956 (NSW) then provided (relevantly):

2 Principal place of residence exemption

(1) Land used and occupied by the owner as the principal place of residence of the owner of the land, and for no other purpose, is exempt from taxation under this Act, in respect of the year commencing 1 January 2005 or any succeeding year, if the land is-

(a) a parcel of residential land, or

(b) a strata lot or, subject to this Schedule, land comprised of 2 or more strata lots.

(2) Land is not used and occupied as the principal place of residence of a person unless

(a) the land, and no other land, has been continuously used and occupied by the person for residential purposes and for no other purposes since 1 July in the year preceding the tax year in which land tax is levied, or

(b) in any other case, the Chief Commissioner is satisfied that the land is used and occupied by the person as the person’s principal place of residence.

…

8 Concession for absences from former residence

(1) A person is taken, for the purpose of the principal place of residence exemption, to continue to use and occupy land formerly used and occupied by the person as a principal place of residence (a former residence), after the person ceases to so use and occupy the former residence, if the Chief Commissioner is satisfied that-

(a) the person used and occupied the former residence as a principal place of residence for a continuous period of at least 6 months, and

(b) the person does not own any other land used and occupied by the person as a principal place of residence.

(2) The maximum period for which a person may be taken, under this clause, to continue to use and occupy a former residence as a principal place of residence is 6 years starting at the end of the last period (of at least 6 months) during which the former residence was used and occupied by the person as a principal place of residence (not including any period for which the person may be taken, under clause 7 or this clause, to have used and occupied the former residence as a principal place of residence).

(3) If the principal place of residence exemption applies to the former residence of a person by operation of this clause, the exemption ceases to have effect if the person is the owner of the former residence at the end of the 6-year period referred to in subclause (2) and fails-

(a) to resume actual use and occupation of the residence as a principal place of residence by the end of that period, and

(b) to continue that use and occupation for at least 6 months.

…

Principal place of residence

36. As to the meaning of principal place of residence, a summary of the applicable case law was provided by Judicial Member M Hirschhorn in Black v Chief Commissioner of State Revenue [2011] NSWADT 66 as follows:

“[81] The definition of ‘principal place of residence’ in section 3 LTMA acknowledges that a person may reside at more than one place during the relevant land tax years. It provides that only one of those places however can constitute the ‘principal’ place of residence: Aronstan v Chief Commissioner of State Revenue [2008] NSWADT 8; Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184 at [19]; Chief Commissioner of State Revenue v Mesiti [2003] NSWADTAP 56 at [37]; Corey v Chief Commissioner of State Revenue [2010] NSWADT78.

[82] In Chief Commissioner of State Revenue (RD) v McIlroy [2009] NSWADTAP 21, the Appeal Panel at [44] set out a useful summary of factors that might be considered in relation to this matter as originally referred to in CCSR v Ferrington [2004] NSWADTAP 41, albeit in the context of the First Home Owner Grant Act 2000:

The factors referred to in Ferrington have been widely adopted in decisions under the First Home Owner Grant 2001. They may be summarised as follows (at [42], with dot points added for clarity and case references removed for ease of reading):-

…First, the words ‘principal place of residence’ should be given their ordinary meaning in the context in which they appear... Thus the Commissioner’s reference to the provisions of the Land Tax Management Act 1956 is of no assistance. Secondly, consideration of whether a person has been residing or occupying premises as their principal place of residence is to be assessed objectively, in the light of the circumstances relating to the actual occupation of the dwelling...

Thirdly, the intention of the person concerned, gauged objectively, is relevant but not determinative of the issue...

Fourthly, 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...

Fifthly, the short length of a person’s residence, while relevant, is not determinative of the issue .... This is so since a recipient’s occupation of a home, while short, may have the requisite degree of permanence to it. But that will not happen if, when considered objectively, the occupation was transient, temporary, contingent or of a passing nature, or for some other purpose. One may occupy premises for a short time on a transient, temporary, or contingent basis, but one can also occupy for a short time as one’s principal place of residence. It is the nature of that occupation which provides the element of permanence. The fact that a period of actual occupation is short, as in the present case, will in practice make it harder for a recipient to show that the occupation was as his or her principal place of residence, but it will not make it impossible....

Sixthly, 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... In Bates the Tribunal said that ‘whether the reasons for not residing at the Property were as a result of matters entirely out of the control of the Applicant’ was a factor to be considered. While that is undoubtedly correct, it should not be read as stipulating a requirement that the reasons for departure must be entirely out of that person’s control. The facts in Gaines illustrate that there are circumstances, peculiar to the individual concerned, which may, objectively viewed, adequately and reasonably explain a person’s decision to move out of a Property, but which are not entirely out of the person’s control.

Because the Appeal Panel in Ferrington was reviewing a decision made under the First Home Owner Grant 2001, it did not consider it appropriate to adopt the meaning of the words ‘principal place of residence’ as used in the Land Tax Management Act. However, this Appeal Panel considers that the factors in Ferrington, while not formulated for applying the specific legislation relevant here, are nevertheless of assistance in construing that legislation. They are not necessarily determinative, and do not displace the developed case law on the meaning of the phrase where it is used in the Land Tax Management Act.

[83] In Carey v Chief Commissioner of State Revenue [2010] NSWADT 78, Judicial Member Perrignon usefully summarised some other authorities in relation to ‘principal place of residence’:

‘The word “principal” is not defined in the Act. Construed in accordance with its ordinary meaning, it denotes the “primary” or “main” residence. Among the meanings ascribed to it in The Macquarie Online Dictionary are: “first or highest in rank, importance, value, etc; chief; foremost”.

The question as to which of two or more residences is the “principal” one is to be determined objectively, having regard to the extent and quality of its use and occupation: Cameron v Chief Commissioner of State Revenue [2009] NSWADT 64 at [46]. The issue has been described as one of “fact and degree”: Downie v Chief Commissioner of State Revenue [2003] NSWADT 233 at [26]. The respective amounts of time which the taxpayer spends in each residence is a relevant factor: Chief Commissioner of State Revenue v McIlroy [2009] NSWADTAP 21 at [41].’”

Surcharge Land Tax

37. The meaning of “foreign person” is set out by Senior Member R J Perrignon in Wang v Chief Commissioner of State Revenue [2023] NSWCATAD 1 at [26]-[27].

38. There is no dispute that the Applicant was at all material times a “foreign person”. The issue is whether the Applicant is entitled to an exemption from surcharge land tax under section 5A(4)(g) of the Land Tax Act, which applies where the land is the principal place of residence of the foreign person in accordance with section 5B of the Land Tax Act.

39. During the 2020 to 2025 tax years, section 5B of the Land Tax Act included the following:

5B Surcharge land tax-residence requirement applying to principal place of residence exemption

(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.

…

(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.

…

40. In Wang v Chief Commissioner of State Revenue [2023] NSWCATAP 331 it was explained by the Appeal Panel that:

“[38] First, section 7 of the LTM Act [Land Tax Management Act 1956 (NSW)] provides that land tax is to be levied and paid on the taxable value of all land situated in New South Wales which is owned by taxpayers (other than land that is exempt from taxation under that Act). It is unnecessary to deal with the LTM Act exemptions in this case as the appellants had not been assessed liable for land tax as their respective half interest in the land did not exceed the tax threshold in Division 4 (formerly Part 4A) of Part 7 of the LMT (sic) Act.

[39] Section 8 of the LTM Act provides that land tax is charged on land owned at midnight on 31 December (that is, the ‘taxing date’) in the year immediately preceding the year on which land tax is levied. A ‘year’ is defined in that section to mean the period of 12 months commencing on the first of January (that is, the ‘levying date’).

[40] In Matiushenko v Chief Commissioner of State Revenue [2023] NSWCATAD 25, the Tribunal observed at [19] and [20]:

[19] The liability to land tax, including surcharge land tax, arises by the direct operation of the Land Tax Management Act; it is not a tax imposed by the Chief Commissioner, rather the Chief Commissioner is obliged due to his general administration of the taxation laws to assess liability to land tax; Gunast v Chief Commissioner of State Revenue [2012] NSWADT 218 at [24]–[34].

[20] There is also no general discretion in the Land Tax Management Act allowing the Chief Commissioner to take account of circumstances that are not the subject of a specific exemption; Volpatti v Chief Commissioner of State Revenue (2007) 67 ATR 312; [2007] NSWADT 222 at [27].

[41] Parliament introduced the imposition of surcharge land tax on residential land in 2016, by inserting s 5A into the Land Tax Act. As we have already noted, s 5A(1) of the Land Tax Act provides that surcharge land tax is payable in respect of residential land owned by a ‘foreign person’.

[42] As noted above, the meaning of the expression ‘foreign person’ is to be found in s 104J (1) of the Duties Act and ss 4 and 5 of the Commonwealth Foreign Acquisitions and Takeovers Act. In summary these provisions, to the extent they apply to the LTM Act and Land Tax Act, provide that:

(1) a ‘foreign person’ is an individual not ‘ordinarily resident’ in Australia: Foreign Acquisitions and Takeovers Act s 4; and

(2) an individual who is not an Australian citizen is not ‘ordinarily resident’ in Australia as at the ‘taxing date’ (midnight on 31 December immediately preceding the year for which land tax is levied) because the individual has actually been in Australia during 200 or more days in the 12 months immediately preceding that date: Foreign Acquisitions and Takeovers Act s 5 and Land Tax Act s 5A.

[43] For example, in this case, as at midnight on 31 December 2016, Mr Chen, was a ‘foreign person’ because as at this date he was not an Australian citizen and he had not actually been in Australia during 200 days or more in the 12 months before this date (that is, during 2016).

[44] Section 5A(2) of the Land Tax Act provides that surcharge land tax is to be charged, levied, collected and paid under the provisions of the LTMA:

in respect of the taxable value of all the residential land owned by the foreign person at midnight on 31 December in any year (commencing with 2016), … for the period of 12 months commencing on 1 January in the next succeeding year …

[45] Section 5A(3) of the Land Tax Act provides that surcharge land tax is payable in addition to any land tax payable in respect of residential land under the provisions of the LTM Act, and is also payable even if no land tax is payable under those provisions.

…

[49] In 2017, s 5B was inserted into the Land Tax Act by cl 4 of Sch 2 of the State Revenue and Other Legislation Amendment (Budget Measures) Act 2017 (NSW), which provided for the principal place of residence exemption to apply to the assessment of land tax in respect of the 2018 land tax year and subsequent years.

[50] In May 2022, Parliament inserted sub-sections 5B(2A) and (2B) into the Land Tax Act: see State Revenue and Fines Legislation Amendment (Miscellaneous) Act 2022 (NSW) Sch 5 cl 1. While these subsections came into effect upon royal assent (19 May 2022) to that Act, this post-dates the date on which Mr Chen and Mrs Wang’s liability for surcharge land tax arose for that land tax year and were not relied on by the respondent before the Tribunal or in these proceedings. Hence, we have not considered these any further, other than to note that they do not alter the findings made by the Tribunal.”

41. Those amending provisions referred to by the Appeal Panel which came into effect on 19 May 2022 are:

(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.

42. Use and occupation for a continuous period of 200 days, for the purpose of section 5B(2), requires a “continuous 200 days of physical presence”: Chen v Chief Commissioner of State Revenue [2025] NSWCATAD 189 at [27], per Senior Member EA Macintyre.

43. In Chen v Chief Commissioner of State Revenue [2025] NSWCATAD 189 Senior Member E A McIntyre discussed the surcharge tax provisions in sections 5, 5A and 5B of the Land Tax Act. In that decision at [20]-[29] it was said:

“[20] The Applicant was not an Australian citizen at the relevant time. Section 5 of the FATA sets out two requirements that a person who is not an Australian citizen needs to satisfy in order to be ‘ordinarily resident’ in Australia. The individual in question must have ‘actually been in Australia’ during 200 or more days in the period of 12 months immediately preceding the time at which ordinary residency is tested. Secondly, the individual must relevantly be in Australia and their continued presence in Australia must not be subject to any limitation as to time imposed by law. Both of these requirements must be satisfied for the Applicant to prove that he was ‘ordinarily resident’ in Australia (Gao v Chief Commissioner of State Revenue [2020] NSWCATAD 216).

[21] The words ‘has actually been in Australia’ requires physical presence in Australia (Chu v Chief Commissioner of State Revenue [2021] NSWCATAD 238, at [29]). Where the Applicant was not physically present, no regard is to be had to the circumstances and the reasons the Applicant was not in Australia (Barsoum v Chief Commissioner of State Revenue [2020] NSWCATAD 282, at [78]; Chu, at [29]-[30]; Lawrence v Chief Commissioner of State Revenue [2022] NSWCATAD 266, at [38]; Song v Chief Commissioner of State Revenue [2023] NSWCATAD 30, at [80]).

…

[27] Once a liability has been established, the next question is whether exemption can be claimed under s 5B of the LTA. Exemption, among other things, requires satisfaction of the ‘residence requirement’, that is, the requirement that the land must be used and occupied by the taxpayer as their principal place of residence for a ‘continuous period of 200 days’ in the land tax year, in the present instance, the 2024 calendar year.

[26] The requirement for use and occupation for a ‘continuous’ period of 200 days is not satisfied on the facts of the matter. This is because during that year, namely 2024, the Applicant had two discontinuous periods in Australia of 191 days (24 June 2024 to 31 December 2024) and 86 days (6 January to 1 April 2024).

[27] The requirement in s 5B(2) for 200 days residence is expressed in language that is clear and unqualified. Such language does not allow for notions of materiality or ‘near enough is good enough’. A continuous 200 days of physical presence is required, subject to the discretion considered below.

[28] The requirement for a continuous 200 days of physical presence is subject to a discretion allowed under s 5B(2B) to waive the requirement. The discretion under s 5B(2B) allows the Respondent in ‘exceptional circumstances’, to waive the requirement in subsection (2A) ‘in relation to a person’’s brief physical absence from Australia’. This is unlike the requirement for 200 days presence in Australia stipulated in s 5 of FATA applied to determining whether or not a taxpayer is ‘ordinarily resident’ in Australia, where no such discretion is allowed.

[29] The question is whether ‘exceptional circumstances’ of the kind referred to in s 5B(2B) have arisen in relation to a ‘brief’ physical absence from Australia. In these circumstances, relief from surcharge land tax may be available.”

44. In relation to the 2022 and prior tax years, there was thus no discretion to waive the requirement of 200 continuous days of use and occupation: Guo v Chief Commissioner of State Revenue [2024] NSWCATAD 309 at [73], per Senior Member J Sullivan.

45. Here the Applicant was not ever present 200 days in the previous tax year and it has been determined that the Property was not the Applicant’s principal place of residence during the relevant periods. But even if those determinations were not made there would be a further problem for the Applicant.

46. The discretion in section 5B(2B), in an appropriate situation, is able to be exercised if there are exceptional circumstances and the period of physical absence was “brief”.

47. The Applicant’s absences were typical of his absences each year since he purchased the Property and reflected that he ran a business and lived in China. The Applicant’s absences from Australia cannot be found to be brief: see Chen v Chief Commissioner of State Revenue [2025] NSWCATAD 189 at [35]-[42].

48. The Respondent submitted that:

“26. The secondary material relating to the making of those amendments was reviewed by Senior Member EA McIntyre in Chen at [30]-[31] who at [32] noted that subsection 2B requires both that the absence occur in exceptional circumstances and be brief. Whether an absence is ‘brief’ is to be ‘measured against the 200-day benchmark in s 5B’: Chen at [36]-[37]. In Chen 87 days absence was not considered to be brief: see at [39].”

49. The Respondent also submitted as follows:

“27. In addition, Practice Note CPN 039 titled ‘Surcharge Land Tax, Sections 5A and 5B of the Land Tax Act 1956 - Principal Place of Residence’ provides guidance on when circumstances will be ‘exceptional’ (at paragraph [17]-[18], including to assist with the care of a sick or dying relative), and explains (at paragraph [21]) that the Chief Commissioner will generally accept an absence from Australia for a period of 21 days to be brief for the purpose of s 5B(2B) of the LTA.”

50. Those submissions accurately summarily state the interpretation of the amendments in Chen v Chief Commissioner of State Revenue [2025] NSWCATAD 189 and the Practice Note, and are consistent with the interpretations previously relied upon by the Tribunal.

Consideration

51. It was submitted by the Applicant in Written Submissions that at no time did the Applicant establish another Property as his principal place of residence away from the Property in Australia. The employer-provided dormitory accommodation in China was submitted to be transient, furnished by the employer, and it is said that it contained none of the attributes of a settled home. The dormitory it is said by the Applicant lacked permanence, ownership, and domestic continuity. It was submitted to be accommodation of convenience, not residence of choice.

52. The Applicant submits that his absences were not elective relocations to establish a new home. The absences from Australia were, it was submitted by the Applicant: (a) employment-driven and inherently temporary; (b) constrained by global COVID-19 border closures; and (c) necessitated by filial caregiving responsibilities of his terminally ill mother.

53. The issue is whether the Property was the primary or main residence of the Applicant. This is to be determined objectively having regard to the extent and quality of its use and occupation. Since the Applicant left the Property, the question arises whether the reasons for the Applicant’s departure from the Property are both reasonable and adequately explained when considered objectively in the light of his personal circumstances. The short periods of residence make it more difficult for the Applicant to establish the Property was his principal place of residence.

54. The objective facts are that the Applicant had a business to run in China, family commitments and a long-term residence there and spent little time in Australia at the Property. It does not matter that the residence in China he asserts he lived in was provided by his employer (which was in reality his own business which he ran), was furnished by his employer or was small. There are contradictory objective facts about where the Applicant actually resided in China. It could not be established by the Applicant on the balance of probabilities where the Applicant primarily lived in China. If the Applicant regarded the Property as his home, subjective intention to return to the Property is not sufficient: see e.g. Guo v Chief Commissioner of State Revenue at paragraph [54(2)]; Wang v Chief Commissioner of State Revenue at [47] and [60]; and C**hief C**ommissioner of S**tate R**evenue v Ferrington (GD) [2004] NSWADTAP 41 see esp. at [42], “the intention of the person concerned, gauged objectively, is relevant but not determinative of the issue.”

55. As a matter of fact, the Applicant was not present in Australia and the reasons for him being absent were more consistent with China being his long-term residence. The Applicant’s connection to the Property was of a transient, temporary, contingent or passing nature and his connection is not sufficient to ground a finding of it being his primary place of residence. The Applicant fulfilled his obligations to his company and his filial obligations, but it is not reasonable to say that therefore his absences were temporary and due to factors beyond his control. They were choices the Applicant made and show that the permanence of his work and residence was in China. Caring for his mother is in accordance with custom and duty, and highly commendable, but that does not establish that he was forced to remain away from Australia. The extent and quality of his occupation of the Property in Australia does not adequately support or lead to a conclusion that it was the Applicant’s primary place of residence.

56. As to the COVID-19 contention of the Applicant, the Respondent submitted that the patterns of travel of the Applicant did not materially change before or after 2020, since he usually visited Australia for 2 occasions per year for short periods of time. In addition, although the Applicant was likely to have been affected by the restrictions on travel in 2020, this is not a year upon which the Respondent places any great significance, instead submitting that the Property never was the Applicant’s principal place of residence. This is considered to be a correct observation and the COVID-19 period is not relevant to an overall assessment.

57. The Applicant’s travel did not appear to be materially affected by the illness of his mother when the pattern of travel before and after the diagnosis and her death did not appear different. There were no exceptional circumstances which kept the Applicant from returning to Australia.

58. The Applicant chose to spend the majority of his time in China and was clearly able to come and go. There is insufficient evidence to find that the Applicant was unable to return to Australia, and the objective facts do not support the Property being his principal place of residence: see Wang v Chief Commissioner of State Revenue [2023] NSWCATAD 1 at [51].

59. The Applicant made reference to transient or “fly in fly out” workers case law in submissions. The Applicant was not a “fly in fly out” (FIFO) worker. The Applicant cannot establish to the requisite degree where he actually usually lived in China. The provision of accommodation by his company does not make him a FIFO worker. The Applicant is the largest named shareholder in his company in China and is a key person in the main company, and the General Manager/Managing Director. The position meant he was paid a substantial salary as disclosed in 2013. It is likely that the level of remuneration is similarly substantial at present and there is no evidence to the contrary. These indicia lead to the conclusion that the Applicant was not a FIFO worker.

60. Thus it is the Tribunal’s conclusion for the reasons already stated that the Applicant has not established that the Property in Australia was his principal place of residence and the reliance upon clause 2 of Schedule 1A of the Land Tax Management Act fails.

61. The Applicant seeks to rely in the alternative to clause 2 of Schedule1A of the Land Tax Management Act on the exemption for absences from a former principal place of residence in clause 8 of Schedule 1A of Land Tax Management Act. The difficulty with this contention is that there is no period of 6 months continuous occupation of the Property identified by the Applicant, and none is apparent from the records previously referred to in these reasons which evidence the actual periods of time the Applicant was in Australia. The longest period of time which can be identified is 108 days for the 2015 calendar year. This equates to about 3 months and 18 days if each month is approximately 30 days. On a percentage basis that equates to about 59% of the period required (if 6 months equals 183 days rounded up).

62. Thus the requirement of clause 8(1)(a) of Schedule 1A of the Land Tax Management Act for 6 months continuous occupation is unable to be satisfied.

Surcharge Land Tax

63. The Applicant is not entitled to an exemption from surcharge land tax under section 5A(4)(g) of the Land Tax Act, which only applies where the land is the principal place of residence of the foreign person in accordance with section 5B of the Land Tax Act.

64. The Applicant claims that the exemption provisions in section 5A and 5B of the Land Tax Act apply, but the Applicant must have used and occupied the Property as his principal place of residence during the relevant period to obtain an exemption from surcharge land tax. Since it is the Tribunal’s decision that the Applicant did not use and occupy the Property as his principal place of residence he cannot rely on these provisions.

65. In Wang v Chief Commissioner of State Revenue [2023] NSWCATAP 331 it was identified that the amending provisions referred to by the Appeal Panel came into effect on 19 May 2022.

66. In relation to the 2022 and prior tax years, there was thus no discretion to waive the requirement of 200 continuous days of use and occupation.

67. The discretion in section 5B(2B) after the 2022 tax year, in an appropriate situation, is able to be exercised if there are exceptional circumstances and the period of physical absence was “brief”.

68. There is insufficient evidence to find that the Applicant was unable to return to Australia. It is not reasonable to say that the Applicant’s absences were temporary and due to factors beyond his control. They were choices the Applicant made and show that the permanence of his work and residence was in China. Caring for his mother is in accordance with custom and duty, and highly commendable, but that does not establish that he was forced to remain away from Australia. There were no exceptional circumstances which can be relied upon.

69. The Applicant’s absences were typical of his absences each year since he purchased the Property and reflected that he ran a business and lived in China. The Applicant’s absences from Australia cannot be found to be brief.

Conclusion

70. There was no statement or evidence before the Tribunal from Ms Zhao. The Respondent invited the Tribunal to find that her (potential) evidence would not have helped the Applicant’s case.

71. There was significant objective evidence of the Applicant’s travel and work in China from documents which were persuasive and not placed in issue. The incoming passenger cards, statements recorded to obtain visas and the application for finance to Westpac are not contradicted by the evidence of the Applicant. The allegation by the Applicant that the broker filled in the finance application incorrectly is not accepted. The Applicant’s status within his companies and his position of authority in the business in China were also accepted as accurate. The Applicant’s role is permanent full time General Manager/Managing Director for a manufacturing company based in China.

72. It is the Tribunal’s finding that the Applicant was primarily resident in China, had a business in China, and visited Australia on occasion to visit friends and relatives while on holiday in Australia. The Applicant may have stayed at the Property when he was present in Australia.

73. The Applicant must demonstrate that he used and occupied the Property as his principal place of residence as at each relevant taxing dates of 31 December in 2020 to 2025. The evidence before the Tribunal does not discharge the onus the Applicant bears to allow the Tribunal to find that the Property in Australia was the Applicant’s principal place of residence.

74. The provisions of section 5B(2A) and (2B) of the Land Tax Act in relation to the surcharge land tax did not apply to the taxing dates of 31 December 2020 to 2022 because they were not then in force, and would not apply to the taxing dates of 31 December 2023 to 2025 because the principal place of residence of the Applicant was not at the Property. Those provisions would not have applied in any event because there were no exceptional circumstances and the periods of absence from Australia were not brief.

75. The assessment of land tax and surcharge land tax by the Chief Commissioner on 18 September 2024 and 20 January 2025 and the objection disallowed by the Chief Commissioner on 19 June 2025 are the correct decisions.

76. Accordingly, for these reasons the Review application is dismissed and the decision under Review is affirmed.

Orders

77. The correct and preferable decision is to affirm the assessments issued by the Respondent.

78. The Tribunal therefore makes the following order:

79. The assessments to land tax and surcharge land tax are affirmed.

80. The application for Review is dismissed.

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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