Australia, June 30 -- New South Wales Land and Environment Court issued text of the following judgement on May 30:

1. In December 2020, the plaintiff purchased a parcel of land subject to an existing development consent for 'demolition of existing buildings and construction of a new three to four storey building shop top housing development'. In accordance with the development consent, she commenced the construction of a four-storey residence on the land, with spaces on the ground floor separately designated for commercial use, residential use and for mixed commercial/residential use. She intended that the commercial spaces, although required to be constructed by the relevant planning approval, would be left vacant.

2. For the 2021 and 2022 land tax years, during the period in which construction was underway but while the land was otherwise unoccupied, the plaintiff was assessed to land tax. The plaintiff objected on the basis that she was entitled to the principal place of residence exemption in Schedule 1A to the Land Tax Management Act 1956 (NSW) (LTMA). She specifically relied on the concession in clause 6(1) of the Schedule, which provided that:

An owner of unoccupied land is entitled to claim the land as the owner's principal place of residence if the owner intends to use and occupy the land solely as the owner's principal place of residence. In such a case, the owner is taken, for the purpose of the principal place of residence exemption, to use and occupy the unoccupied land as the owner's principal place of residence.

3. Her objection was disallowed because the defendant took the view that the plaintiff did not intend to use and occupy the land solely as her principal place of residence, as required by clause 6(1).

4. The plaintiff sought a review of the defendant's decision by the Civil and Administrative Tribunal. In those proceedings, in addition to its contention about the clause 6(1) issue, the defendant also contended that the plaintiff had failed to demonstrate her compliance with clause 6(2)(c) of the Schedule. That clause relevantly provided:

(2) This clause does not apply unless-

...

(c) the intended use and occupation of the land is not unlawful.

5. The defendant relied in this regard on the fact that in the defendant's view of the law the plaintiff was not permitted to use the land exclusively for residential purposes, either under the development consent or in accordance with the Local Environment Plan under which the land was zoned 'B1 Neighbourhood Centre', and that the plaintiff's intention to live in the property involved an impermissible use of the commercial spaces even if she kept the commercial spaces vacant.

6. The plaintiff did not dispute the content of the development consent or the Local Environment Plan. She accepted that the building was required to have dedicated commercial spaces in order to comply with both of those instruments. She accepted that those spaces could not be used for residential purposes. Her case was that she intended to use the whole of the land for residential purposes, including by leaving the commercial spaces vacant. She contended that it was not unlawful to do so because, in her submission, as the law stood at the relevant time neither the Local Environment Plan nor the development consent required her to apply for an occupation certificate for the commercial spaces. Her point was that as the law stood at the relevant time, she was required to build those spaces but they were not required to be occupied.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/1971e66ff957d99aa6132cf8)

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