Taxpayer successfully dodges nearly $45k in land tax after appeal win

A taxpayer has successfully avoided paying nearly $45,000 in land tax after the NSW Civil and Administrative Tribunal found on appeal that the principal place of residence exemption applied to an adjoining lot, despite the Chief Commissioner of State Revenue contending that “...the adjoining lot is not exempt because it does not satisfy the relevant provisions for exemption and contains a separate building which is capable of being used for separate occupation”.

Tribunal senior member Jan Redfern said the proceedings raised issues about the construction and operation of the statutory provisions concerning the principal place of residence exemption and factual disputes about the condition of the adjoining property claimed to be included in the exemption.

Following receipt of a land tax assessment notice of nearly $44,980 in early 2025 for that financial year from the chief commissioner, the taxpayer sought a review of the decision against the chief commissioner, lodging an application with the tribunal in late 2025 on the grounds that adjoining properties were being used as his principal place of residence and hence should be exempt from land tax.

In her 14 July 2026 Tribunal decision, Redfern found that the taxpayer had owned a property (lot 43) on the Northern Beaches since around 1974, and that it became his principal place of residence in about 1978.

Seeking an alternative to using a nearby self-storage provider, the taxpayer purchased the next-door property (lot 45) in late 2012 to store his vintage car and personal items.

“According to the applicant, when he purchased the property, it was poorly maintained and the garden was overgrown,” Redfern found.

Further, expert evidence revealed that lot 45 was approximately 60 to 70 years old, and the infrastructure of the lot is “aged and deteriorated”.

“The garden was overgrown, and the property appeared to have had little proper maintenance for a long period of time. He inspected the property when he purchased it and noticed that the interior appeared to be quite rundown,” Redfern added.

In expert evidence, the property was also found to have several issues, with the applicant raising electricity concerns.

“He decided not to live in the property because it was in such a poor state of repair and he used the garage area for storage,” the senior member found.

“The most significant defects, relating to mould, water ingress, damp and the safety of the balconies, were essentially agreed on by the experts,” she added.

“The applicant contends that he has never occupied the [adjoining] premises and that it was not fit, and remains unfit, for occupation,” she found.

Redfern said that these are the matters that go to the health and safety of the occupation of the premises, and before lot 45 could be fit for occupation, these matters should be remediated.

In consideration of the state of the property in question, Redfern ruled that the principal place of residence exemption applied to lot 45, setting aside the chief commissioner’s decision to impose $44,980 in land tax on the taxpayer.