The vast majority of the decisions we make each year are undisputed by our customers, but inevitably there are situations where litigation is required to resolve an issue.
The following case summaries illustrate some of the types of cases conducted in 2025–26.
Duties Act 2000 (Duties Act)
Sub-sale provisions
Sky Jade Corporation Pty Ltd v Commissioner of State Revenue [2026] VCAT 421
Background
The taxpayer was assessed for duty under the sub-sale provisions of the Duties Act. This was on the basis that it had contracted to purchase 3 properties, nominated related entities to take the transfers, and land development had occurred in relation to each property after the contract date.
Issue
Whether the nominees had obtained a ‘transfer right’ for the purposes of s32I(1)(b) of the Duties Act, despite having no contractual rights against the vendor.
Decision
On 2 June 2026, the Tribunal decided the matter in favour of the Commissioner, confirming the assessments.
The Tribunal held that:
- the nominees did obtain a ‘transfer right’ as clearly intended by the provisions
- such a right was not confined to a right as against the vendor, but may constitute a right against the purchaser under the contracts.
Spousal transfers of principal place of residence
Guan v Commissioner of State Revenue [2026] VCAT 290
Background
In 2014, Mr Guan became the registered proprietor of a property in Balwyn North.
In 2019, he transferred the property to himself and his wife Mrs Li (the taxpayers) as joint tenants.
The Commissioner originally exempted the transfer under s43 of the Duties Act, which exempts from duty some transfers of a principal place of residence (PPR) between spouses.
A specific requirement is that a person occupies the residence for a continuous period of at least 12 months commencing within a 12-month period immediately after the transfer (the residence requirement).
Issue
Whether, following an investigation, the Commissioner had correctly reassessed the taxpayers to duty, penalty and interest on the basis that exemption requirements in s43A of the Duties Act (the residence requirement) had not been met.
Decision
On 29 April 2026, the Tribunal handed down its decision. The Tribunal partially reduced the penalty tax but otherwise confirmed the reassessment. The Tribunal found the following:
- The taxpayers did not meet the residence requirement after the transfer (as required by s43A), notwithstanding that they had been using the property as their PPR for a couple of years prior to the transfer.
- There was no good reason to vary the residence requirement in this instance, and the power to vary the residence requirement does not permit the Commissioner or the Tribunal to vary it such that no period of residence is required after the transfer.
- In relation to penalty tax, the information provided by the taxpayers in relation to the prior land tax investigation was a ‘pre-investigation’ disclosure, such that the reduction in section 31(1) of the Taxation Administration Act 1997 applied. Therefore, the penalty tax of 25% was reduced to 5%.
When considering the remission of penalty and the requirements of ‘reasonable care’, it also observed: “A reasonable person in their situation would have been aware that property transactions usually attract a tax duty. A reasonable person would have taken affirmative steps to fully familiarise themselves with the any potential tax obligations arising from the transfer of the Balwyn property. This is the case regardless of the person’s English proficiency. A reasonable person would not have relied on statements from an estate agent only, and would have sought expert advice and made further inquiries.”
The Tribunal also remarked: “A misunderstanding of the law is not a basis for remission of the penalty tax.”
In relation to interest, the Tribunal concluded it was not appropriate to remit the market interest imposed in the assessment.
Off-the-plan duty exemption, PPR duty concession and imposition of penalty
Kumar v Commissioner of State Revenue (Review and Regulation) [2025] VCAT 695
Background
In August 2017, Mr Kumar and Mrs Kumari (the taxpayers) entered an off-the-plan contract of sale to purchase residential land in Avondale Heights in Victoria (the relevant property). At the time they lived and worked in Western Australia.
Issue
Whether, following an investigation, the Commissioner was correct to reassess the taxpayers on the basis that:
- the taxpayers were not eligible for the off-the-plan and PPR concessions, and
- penalty tax at a rate of 90% should be imposed because the taxpayers had intentionally disregarded a taxation law and took steps to prevent or hinder the Commissioner from becoming aware of the nature and extent of the tax default.
Decision
On 4 August 2025, the Tribunal handed down its decision in favour of the Commissioner, confirming the reassessment to duty, including imposition of 90% penalty tax and interest.
In the circumstance, the Tribunal was comfortably satisfied that:
- the taxpayers did not occupy the relevant property as their PPR (or at all) for a continuous period of 12 months commencing within 12 months of its acquisition and therefore did not satisfy the residence requirement
- having regard to all of the circumstances, there was no ‘good reason’ to exercise the discretion in s57L to extend the time to start the necessary period of occupation
- having regard to the taxpayers’ conduct during the investigation and in respect of the objection and review process, the penalty had been appropriately imposed at the rate of 90% and there was no basis for remission of the penalty tax or interest.
PPR concessions and first home buyer duty exemption
Tran v Commissioner of State Revenue (Review and Regulation) [2025] VCAT 581
Background
On 20 December 2017, Ms Tran (the taxpayer) completed the purchase, and became the registered proprietor, of a residential property in Werribee (the property) on 10 January 2018.
The taxpayer indicated in her Transferee Statement that she intended to occupy the property as her PPR from completion and claimed the PPR concessions and first home buyer exemption (the duty benefits) under the Duties Act. As a result, the Commissioner charged no duty on the transfer.
Following a later investigation, the Commissioner determined that the taxpayer had not met the requirements of the duty benefits and reassessed the taxpayer to duty, and imposed a penalty of 25% and interest.
Issue
Whether:
- the taxpayer satisfied the residence requirement in s57K of the Duties Act, and lived in the property as her PPR for a continuous period of 12 months commencing within 12 months of becoming entitled to possession, and therefore was entitled to:
- the PPR concessional rate, and
- the first home buyer duty exemption in respect of the transfer
- the Commissioner correctly imposed penalty tax and interest on the taxpayer.
Decision
On 3 July 2025, and after further post-hearing written submissions from the parties, the Tribunal handed down written reasons for decision, determining that:
- the taxpayer did not discharge her onus of proving, on the balance of probabilities, that she satisfied the residence requirement in s57K of the Duties Act
- the Tribunal does not have a discretion under s57M(1)(b) of the Duties Act in relation to the reassessment of duty where the residence requirement has not been satisfied
- while the taxpayer did not take reasonable care to comply with her tax obligations, it is appropriate to remit the penalty tax from an effective rate of 25% to 10% having regard to the treatment of first home owner grants and taking account of all the taxpayer’s circumstances
- the interest which accrued to the date of the assessment should not be remitted.
The Tribunal concluded: “That is not to say that Ms Tran never visited the Relevant Property. However, she has not provided any proper explanation, and supporting evidence, for the low utility usage. That low usage is more consistent with merely sleeping at the property, which the cases establish is insufficient to satisfy the Residence Requirement.”
Further: “As indicated in Mercuri v Commissioner of State Revenue, entry into an exclusive leasing authority within the period necessary to satisfy the Residence Requirement for leasing to start after that period is:
- ‘more consistent with an intention to hold the Unit for investment than as a [principal place of residence]’; and
- ‘[v]iewed objectively … [consistent with] going through a “ritual of occupancy … necessary to get the grant”.’”
Land Tax Act 2005 (Land Tax Act)
Land tax PPR exemption and vacant residential land tax
Zhu v Commissioner of State Revenue (Review and Regulation) (Corrected) [2025] VCAT 926
Background
This matter concerns the liability of Ms Y Zhu (the taxpayer) for land tax and vacant residential land tax. The taxpayer had purchased a property in Forest Hill (the land), with settlement occurring in December 2021.
Following an investigation, the Commissioner determined that the land did not qualify as the taxpayer’s PPR for the 2022 and 2023 land tax years due to her limited occupancy. This led to an assessment of land tax for the 2022 year and an assessment of land tax and vacant residential land tax for 2023.
Issue
Whether:
- the taxpayer met the criteria for a PPR exemption for the 2022 and 2023 land tax years
- the land was vacant residential land for the 2023 land tax year.
Decision
On 22 October 2025, the Tribunal handed down its decision, confirming the reassessments to both land tax and vacant residential land tax for the relevant years.
The Tribunal found that the objective evidence suggested that the taxpayer and her late husband continued to reside at their daughter’s home until in or around March 2023 when they hired a van and moved their household effects to the land.
The Tribunal observed: “the evidence of utilities usage at the Relevant Property is only consistent with Ms. Zhu’s initial explanation (i.e. in her May 2023 Correspondence) as to the use of that property prior to March 2023, namely that she and her husband:
- would visit the property on weekends to garden and conduct other maintenance, but,
- otherwise spent the majority of their time eating, sleeping and engaging in the other activities of life (e.g. showering) at their daughter’s house.”
Land tax ownership and PPR exemption
Richwol v Commissioner of State Revenue (Review and Regulation) [2025] VCAT 1065
Background
This matter concerns the liability of Ms K Richwol (the taxpayer) for land tax as a registered proprietor of a 50% interest in land in Brighton East – Lot 11A (11A Land), which her sister-in-law occupied as her PPR.
The taxpayer accepted she used and occupied the neighbouring land (11B Land) as her PPR, for which she had already claimed the PPR exemption under s54 of the Land Tax Act.
The taxpayer initially contended she held her 50% interest in the 11A Land on trust for her sister-in-law who was using the 11A Land as her PPR, and it should therefore be exempt under s54.
The taxpayer’s submissions changed at the hearing, where she contended she was not an owner of 50% of the 11A Land within the meaning of s10(1) of the Land Tax Act – on the basis she was not a ‘person entitled to land for a freehold estate in possession’ on the basis her sister-in-law had exclusive rights to use the 11A Land.
Issue
Whether the taxpayer was liable to land tax in respect of her 50% interest in the 11A Land for the 2023 land tax year.
Decision
On 3 December 2025, the Tribunal confirmed the assessment of the taxpayer to land tax for the 2023 land tax year on the taxpayer’s half share of the 11A Land.
In reaching its decision, the Tribunal considered various authorities which considered the meaning of the terms ‘owner’ and ‘estate in possession’.
The Tribunal took the view that as one of the 2 registered proprietors of the 11A Land, the taxpayer had a present right of beneficial enjoyment even though she allowed her sister-in-law and her family to have exclusive use and occupation of the land.
It followed that, for land tax purposes:
- the taxpayer was an owner of the 11A Land
- the taxpayer and her sister-in-law were joint owners of the 11A Land
- the taxpayer was liable to land tax on the taxpayer’s half share of the 11A Land because she did not use and occupy that land as her PPR.
Primary production land
Delma Investments Pty Ltd (ACN 004 475 498) v Commissioner of State Revenue [2026] VSCA 53
Background
The taxpayer had owned land (the land) at Woodstock, a suburb in Melbourne’s north, since 1966. At all relevant times, the taxpayer had 4 directors who were all related and included Mr David Douglas.
They were also the only shareholders in the taxpayer, in equal shareholdings of 51/204 ordinary share. As at 2019, 3 of those shareholders were either close to or over 70 years old.
The land is located in an urban zone in greater Melbourne and comprises 310 acres and has 6 paddocks. The land had been used for farming activities by the Douglas family since it was first acquired, but had recently been sold for the sum of $50 million.
The taxpayer objected to the 2020 and 2021 land tax assessments on the basis that the land was exempt under s67 of the Land Tax Act. The taxpayer submitted that the land was:
- used primarily for the business of primary production (cattle) (s67(1)(a)(iii))
- the business was the principal business of the taxpayer (s67B(1)(b))
- Mr Douglas was normally engaged in a substantially full-time capacity in the business of primary production carried out on the land (s67B(2)(a)(ii)(B)) (the engagement issue).
If any of the above elements were not met, the land would not be exempt land under s67 of the Land Tax Act.
Decision – Supreme Court (earlier decision)
On 25 October 2024, the Supreme Court handed down the decision substantially in favour of the Commissioner (Delma Investments Pty Ltd v Commissioner of State Revenue [2024] VSC 649).
While the Supreme Court found that the land was used “primarily for the business of primary production” and the principal business of the taxpayer was the “business of primary production”, it determined “Mr Douglas was not normally engaged in a full-time capacity in Delma’s business of primary production” (s67B(2)) – and therefore affirmed the assessments.
Decision – Court of Appeal (current decision)
On 6 December 2024, the taxpayer applied for leave to appeal the decision to the Court of Appeal on the engagement issue and submitted that the words ‘normally engaged in a substantially full-time capacity’ should take their meaning by reference to the ‘requirements’ of the business in issue.
On 27 March 2026, the Court of Appeal handed down the decision in favour of the Commissioner.
In summary, the Court of Appeal found that:
- the taxpayer’s “construction found no support whosoever in the language of the relevant provision”
- “the concept of being in a ‘substantially full-time capacity’ is an ordinary phrase readily understood as applying to a person such as an employee, or contractor and measured by reference to commonly understood community standards … The phrase does not import any reference to the ‘needs’ of the business or anything like it. It simply identifies where the purpose must be engaged, namely, ‘in the business’.”
The Court of Appeal concluded that the taxpayer’s construction was “therefore not available on the language of the provision.”
Land tax ownership
Abraham v Commissioner of State Revenue [2026] VCAT 351
Background
The Commissioner assessed Mrs H Abraham (the taxpayer) to land tax for the 2023 land tax year for land situated in Lorne (the land).
It was not disputed that the land was not the taxpayer’s PPR at the time, but rather the family holiday home. The taxpayer contended that the Commissioner should have assessed the trustees of her late husband’s estate on the 50% interest in the land in lieu of herself.
Section 11 of the Land Tax Act provides that a person who holds a life estate in possession in land is deemed to be the owner of the land, instead of the person entitled to the fee simple (in reversion or remainder).
Issue
Whether the taxpayer held a life estate in possession in and was therefore deemed to be the owner of 50% of the interest in the land instead of the trustees of the estate of her husband, the late Mr I Abraham.
Decision
On 18 May 2026, the Tribunal found in favour of the Commissioner, confirming the assessment.
The Tribunal concluded that clause 3 of the Will conferred a life estate in possession on the taxpayer in respect of Mr Abraham’s half share of the land for the purpose of section 11 of the Land Tax Act.
In reaching its decision, the Tribunal had regard to:
- the words used in clause 3, particularly in granting the taxpayer the right to ‘use and occupy’ the land during her lifetime
- “the context of the Will as a whole, noting that there is no language employed that is apt (individually or collectively) to displace the general rule of construction that a grant of a right to ‘use and occupy’ land confers a life estate”
- the nature of the land (i.e. a holiday house) and the obligations imposed on the taxpayer to maintain it and cover the costs of rates and taxes, which was more consistent with a secure and ongoing interest than a right to reside, which may or may not be taken up and could be lost by a failure to do so.