VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
administrative DIVISION
REVIEW AND REGULATION LIST	
vcat reference No. Z320/2024	
CATCHWORDS	
Review and Regulation List – Land Tax Act 2005 (Vic), s 34C – Imposition of vacant residential land tax (‘VRLT’) in respect of a property in Yarraville for the 2019 land tax year – Admissions by applicant that he did not reside in the property between 1 January and 31 December 2018 – Irrelevant that the property subsequently became uninhabitable – No evidence of reasonable care or other basis for remission of the penalty – Assessment confirmed – Land tax and VRLT imposed for other land tax years not before the Tribunal.	

APPLICANT	Peter Gerard Burke	
RESPONDENT	Commissioner of State Revenue	
WHERE HELD	Melbourne	
BEFORE	R Tang AM, Senior Member	
HEARING TYPE	Hearing	
DATE OF HEARING	2 June 2025	
DATE OF ORDER and reasons	2 June 2025	
DATE OF WRITTEN REASONS	3 June 2025	
CITATION	Burke v Commissioner of State Revenue (Review and Regulation) [2025] VCAT 493	
 
Order
The assessment of vacant residential land tax for the 2019 land tax year, made by the respondent on 2 June 2023 (assessment no. 64973013), is confirmed.

R Tang, AM
Senior Member			

APPEARANCES:		
For Applicant	In person	
For Respondent	Mr R Chaile of Counsel	

Note: This is an edited version of the oral reasons provided at the conclusion of the hearing, with minor edits to improve the expression in written form.
Reasons
1	This proceeding concerns review of an assessment issued by the Commissioner of State Revenue (‘Commissioner’) to Mr Peter Burke on 2 June 2023 (‘Assessment’), imposing vacant residential land tax (‘VRLT’) in the sum of $9,500, for the 2019 land tax year, in respect of a property he owns in Yarraville (‘Relevant Property’).  In addition, the Commissioner imposed penalty tax of $1,900 (at the rate of 20%).
2	For the reasons which follow, I consider the Commissioner was correct to assess Mr Burke to VRLT in respect of the Relevant Property for the 2019 land tax year and to impose penalty tax at the rate of 20% and there is no proper basis to further remit the penalty tax.  As such, I have confirmed the Assessment.
Procedural history
3	At the outset, it is necessary to set out some of the procedural history relating to how this matter came to be before the Tribunal.
4	By letter dated 2 August 2023, Stratus Legal Group objected to the Assessment (including the penalty tax), and several other assessments, on Mr Burke’s behalf (‘Objection’) on the basis that the Relevant Property was ‘currently uninhabitable and, as such, [Mr Burke] seeks an exemption pursuant to section 34C(4A) of the Act’.  It is relevant to note the other assessments also concerned the Relevant Property and imposed: 
•	VRLT for the 2020 land tax year; and
•	land tax for the 2019 to 2023 land tax years.  This was imposed by reassessment following the withdrawal of the principal place of residence (‘PPR’) exemption which had previously been applied to the Relevant Property for those years.
(In these reasons, they are referred to collectively as the ‘Related Assessments’).
5	On 19 January 2024, following the Commissioner’s disallowance of the Objection, Mr Burke requested that the matter be referred by the Commissioner to the Tribunal under section 106 of the Taxation Administration Act 1997 (Vic) (‘TA Act’) and a series of separate referrals were made in respect of the Assessment and each of the Related Assessments on 19 March 2024.
6	For the reasons explained by Member Glover in Genr8 Digital Media Pty Ltd & Ors v Commissioner of State Revenue, challenges to different notices of assessment are ‘necessarily … separate matters’ and, as such, require payment of filing fees in respect of each matter referred under section 70(1) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (‘VCAT Act’).  Further, under section 70(2), the Tribunal ‘may refuse to continue with a proceeding on a referral if a fee payable for the referral has not been paid’.
7	On 2 July 2024, Mr Burke emailed the Tribunal’s registry to indicate that he had completed a credit card authorisation for the filing fee payable in respect of this proceeding but that, if the Tribunal determined the Related Assessments ‘are to be discontinued [he] acknowledge[d] that would be the determination of the Tribunal’.  Due to his failure to pay the filing fees for the review of each of the Related Assessments, on 6 August 2024, a delegate of the principal registrar struck out the proceedings relating to those assessments, ‘with a right to apply for reinstatement upon payment or waiver of the application fee’.
8	Accordingly, this proceeding (and so these reasons) only relates to the Assessment by which VRLT was imposed for the 2019 land tax year.  
Overview of the relevant legislative framework
9	VRLT is imposed under section 34A of the Land Tax Act 2005 (Vic) (‘LT Act’).  However, unlike ordinary land tax, VRLT only applies to a subset of land in Victoria, being residential land which is vacant and, until recently, located within one of the identified municipalities (including the City of Maribyrnong which covers Yarraville).
10	Nevertheless, as explained in Zheng v Commissioner of State Revenue (‘Zheng’):
[w]hile the [VRLT] may seem to be a tax in its own right, it is clearly a species of land tax.  Accordingly, it is to be assessed in the same way as any other land tax, with the tax for a given land tax year based on the ‘total taxable value of all taxable land’ held at midnight of the preceding 31 December.
11	Residential land is defined in section 34B(1) as land that ‘is capable of being used solely or primarily for residential use’.  For the reasons discussed in Zheng, the question of whether a particular piece of land is residential land is ‘to be determined at 31 December of the calendar year preceding the tax year’. 
12	The question of whether the land is ‘vacant’ is to be determined under section 34C.  That section provides that land is vacant ‘if it has not been used and occupied for a period (whether continuous or aggregate) of greater than 6 months in the year preceding the tax year’ by the owner or a permitted occupant as their PPR, or under a ‘genuine’ lease or short-term letting arrangement.
13	While the requirement under section 34C, for land to be used or occupied as a person’s PPR, has not been the subject of a previous decision in relation to VRLT, similar concepts are employed elsewhere in the LT Act and in other legislation, such as the First Home Owner Grant and Home Buyer Schemes Act 2000 (Vic).  As such, decisions concerning similar legislation are helpful in understanding section 34C.
14	In Ziino v Commissioner of State Revenue, a case dealing with the first home owners grant, Senior Member Davis referenced an English decision for the proposition that the ‘place of residence of a person is the place where he eats, drinks and sleeps’ and suggested that the notion remained applicable at the date of his decision.  He reiterated the relevance of that notion in Salamon v Commissioner of State Revenue, in a land tax context, as recently as 2019.
Was VRLT correctly imposed for the 2019 land tax year?
15	In a letter that Mr Burke sent to the Commissioner on 28 February 2023, he states that the Relevant Property was burgled and that, as a result of the removal of all copper piping, the property was rendered ‘uninhabitable’.  The Tribunal Book includes some photos which show extensive damage and an absence of taps in the bathroom and kitchen.
16	In his evidence before the Tribunal, Mr Burke confirmed that the burglary took place in 2021 and the photos he had provided to demonstrate the property was uninhabitable were taken after that time.
17	It follows that there is no evidence of the property being uninhabitable as at 31 December 2018 and, for that reason, I am satisfied on the balance of probabilities that the Relevant Property was ‘capable of being used solely or primarily for residential purposes’ and was therefore residential land at that time.
18	In his letter to the Commissioner, Mr Burke also stated that:
Since … 2014, the Yarraville property, being available, has been used by my family for storage of [a relative’s] remaining belongings and furniture …
19	Given the admission that the Relevant Property was simply used for storage purposes, and the evidence that zero water was used throughout the 2018 and 2019 calendar years, it is clear (and I find) that it was not the principal place of residence of Mr Burke or anyone else for the 2019 land tax year.  
20	Further, based on those matters and the further evidence that the Relevant Property was not leased to any third party, I am satisfied (and find) it was vacant for more than six months during the 2018 calendar year.
21	Finally, in his letter, Mr Burke references a ‘wider context’, which includes difficulties in divesting his relative’s belongings and furniture, the COVID-19 lockdowns and his medical condition and operations, and the consequent delay in being able to ‘improve the property and revert to use as accommodation’, noting that he had (by 2023) sought a planning permit for the construction of ‘two new townhouses’.  Mr Burke submits that, considering that wider context:
discretion ought to be regarded in relation to my matter as it would represent only a very minor case at best and any errors made have been entirely inadvertent while I have at no time sought to deceive or deliberately avoid civic obligations acting at all times honestly and with integrity with respect to such obligations.
22	The difficulty with this submission is that the discretion sought to be relied upon, which is found in section 34C(4A) of the LT Act, relates to amendments which were made to the VRLT regime in 2019 and applicable from 1 January 2020.  It has no relevance to the Assessment which is before the Tribunal.   
23	It is also relevant to observe that, prima facie, VRLT has always applied to land subject to construction or renovation where that construction or renovation takes more than two years from the granting of a planning permit.  Further, the Commissioner has always had a discretion to allow land to continue to be treated as vacant if there is an ‘acceptable reason’ for the construction or renovation taking longer.
24	Of course, in the present case, there is no evidence of any construction or renovation commencing in the 2018 calendar year.  Further, there is no discretion given to the Commissioner to treat land as not being vacant where there is an intention to construct or renovate premises which is unable to be commenced, no matter how acceptable (or otherwise) those reasons may be.
25	For these reasons, I consider that the VRLT was correctly imposed by the Commissioner for the 2019 land tax year.
Was penalty tax correctly imposed?
26	A taxpayer is liable to penalty tax in various circumstances, including if a ‘notification default’ occurs.  A notification default is defined to include a failure to lodge a notice under section 34G of the LT Act.  Section 34G requires an owned of ‘VRT land’ to lodge a written notice with the Commissioner by 15 January each year which is ‘in the form and contain[s] the information determined by the Commissioner’.  There is an ‘online portal’ on the Commissioner’s website for providing notification (or claiming any relevant exemption from VRLT).
27	It has not been suggested by Mr Burke that he made any notification in respect of the Relevant Property, rather he claims that he was never advised that the Relevant Property was being treated as his PPR and, as such, any error was ‘inadvertent’.  While that may be relevant to remission (as discussed below), it is not relevant to whether the penalty tax was correctly imposed.
28	Accordingly, I am satisfied that there was a notification default.
29	Section 30(1A) of the TA Act provides that the amount of penalty tax payable in respect of a ‘notification default’ is 25% of the additional tax payable ‘had the notification default not occurred’.
30	The rate of penalty tax may be increased or decreased in various circumstances.  Relevantly, it may be reduced by 20% (i.e. to a rate of 20%) if the taxpayer has made voluntary disclosure of information enabling ‘the nature and extent of the default to be determined’.
31	Appropriately, the Commissioner treated Mr Burke’s letter of February 2023 and other information he provided as being voluntary disclosure of this type.
32	I am satisfied that penalty tax has been applied correctly in accordance with the TA Act.
Should the penalty tax be remitted?
33	The Commissioner may determine that ‘no penalty tax is payable’ in respect of a notification default where a taxpayer has either been found to have taken ‘reasonable care’ to comply with the relevant taxation law or the default has occurred solely because of circumstances beyond the taxpayer’s control.
34	The authorities make it clear that ‘reasonable care’ requires appropriate steps being taken by a taxpayer to ascertain their liabilities, such as by seeking legal advice or approaching the State Revenue Office (‘SRO’).
35	It has not been suggested by Mr Burke that he sought such advice or that he ever approached the SRO to clarify whether VRLT applied to the Relevant Property.  Rather, he contends that the Commissioner simply treated the Relevant Property as his PPR and his failure to notify that it was not his PPR was due to inadvertence due to a failure on the part of the Commissioner to contact him.
36	A difficulty with this proposition is that it was Mr Burke, through his solicitor or agent, that identified the land as his PPR in the Notice of acquisition of an interest in land filed at the time that he acquired the Relevant Property.  Further, while it is not before the Tribunal, it must be the case that for each land tax year thereafter, Mr Burke would have received a land tax assessment indicating that the Relevant Property was being treated as his PPR (and exempt from land tax), while the property in Ascot Vale at which he said he lived was subject to land tax.  
37	Further, I take general notice of the fact that, following the enactment of the VRLT regime, the Commissioner did engage in public education to assist taxpayers in understanding their responsibilities under that regime.  
38	In these circumstances, I do not consider that Mr Burke took reasonable care or that the notification default arose due to reasons beyond his control and, as such, there is no basis for the penalty tax to be remitted under section 30(3).
39	There is a broader discretion to remit penalty tax under section 35 ‘in such circumstances as the Commissioner considers appropriate’.  However, I do not consider that the matters relied upon by Mr Burke justify the favourable exercise of that discretion.
The Related Assessments
40	In his closing submissions, Mr Burke contended that the Tribunal’s registry had informed him that, despite the proceedings concerning the Related Assessments having been struck out, the presiding member could consider those matters at the final hearing as a matter of discretion.
41	In response, Mr Chaile (counsel for the Commissioner) said the Tribunal had made it clear at a directions hearing held on 10 September 2024 (and in the orders made on 17 September 2024) that the proceedings related to the Related Assessments had been struck out and that it would be procedurally unfair for the Tribunal to engage in a consideration of those assessments where neither party has addressed them.
42	Under section 98(1) of the VCAT Act, the Tribunal is ‘bound by the rules of natural justice’, including the obligation to provide a fair hearing.  That obligation is owed to both parties to a proceeding.
43	I accept the Commissioner’s submissions that it would be a matter of unfairness for the Tribunal to now consider the Related Assessments.  This is particularly so where Mr Burke has made a conscious decision to pay the fee for the proceeding related to the 2019 VRLT assessment and not to do so for the Related Assessments. 
44	Of course, by the terms of the orders made on 6 August 2024, he can apply to reinstate one or more of those proceedings should he pay the relevant fee or fees.  However, I would urge Mr Burke to seek some legal advice as to the impact of this decision, and any relevant differences in the applicable legislative provisions and/or relevant facts for the land tax year or years in question, before doing so.  

R Tang, AM
Senior Member