Deciding on a principal place of residence

In a recent case, a parcel of land was found to be exempt from land tax where the land owner was living in a garage he had built on the land. The law exempts land that is a “principal place of residence” from land tax.

The person had bought land three doors away from his mother and decided to build a new residence on it. First though, he built a garage which he claimed to live in as his principal place of residence.

The Commissioner of State Revenue argued that it was not, primarily because he felt the land owner did not really live in the garage which had been built on it. The Commissioner argued that the architectural design and physical character of a garage was inappropriate for residential purposes and that a mere sleeping place was not “residential” in the relevant sense.

The Tax Office has standard procedures in seeking to show a parcel of land is not a person’s principal place of residence, invariably looking at tax returns, electricity bills, driver’s licence and the like, in order to match up the addresses on those returns, bills and licence with the address of the claimed principal place of residence.

In the case, the tribunal decided that the land was not used for anything other than the development of the new house and as the person’s residence.

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