Ken Lord appeared for the Chief Commissioner in Vatner v Chief Commissioner of State Revenue [2025] NSWCA 35.

The matter concerned NSW land tax and the application of the principal place of residence exemption in s 10(1)(r) and Sch 1A of the Land Tax Management Act 1956, especially the concession in cl 6 of Sch 1A for unoccupied land intended to be the owner’s future principal place of residence. The facts involved the demolition and reconstruction of 3 strata units into a single new unit and strata lot.

The Court of Appeal dismissed the taxpayer’s appeal.

The Court of Appeal held the ‘unoccupied land’ that is the subject matter of the cl 6 concession must be the land which would otherwise be the subject of land tax on the relevant taxing date. On the facts, the relevant unoccupied land was the 3 strata lots registered on each of the relevant taxing dates. The new lot created by the later registration of a strata subdivision could not be the subject of the concession. The Court of Appeal upheld the conclusion of the primary judge that the cl 6 concession did not apply as the taxpayer did not intend to use and occupy all of his unoccupied land as his future residence.

The Court accepted that the new lot which the taxpayer intended to use and occupy as his residence was materially different from the original 3 lots. The floor area excised from the original 3 lots which was not intended to be occupied by the taxpayer as his residence was not de minimis.

The Court of Appeal also accepted the argument made by the Chief Commissioner in a notice of contention that the single residence requirement in cl 14 (dealing with a residence comprising 2 or more strata lots) was not satisfied on the relevant taxing dates due to the lack of internal access between the original 3 strata lots.

The judgment may be found here.