Australian Investment & Development Pty Ltd v Commissioner of State Revenue [2025] VSCA 47

Background

The Commissioner issued land tax assessments to the taxpayer for land it owned in Diggers Rest for the 2014, 2015 and 2016 land tax years.

Issue

The taxpayer objected to these assessments, claiming the land was exempt under ss67 and/or s68 of the Land Tax Act 2005 (the primary production land exemptions).

The taxpayer claimed:

• the land was being primarily used for the business of growing cassina plants for the purpose of sale
• the taxpayer’s principal business was that business
• a director and shareholder was requisitely engaged in the same type of primary production.

The Commissioner disallowed the objection, and the taxpayer requested the matter be set down as an appeal in the Supreme Court.

Decision – Supreme Court

On 13 December 2023, the Supreme Court handed down its decision in Australian Investment & Development Pty Ltd v Commissioner of State Revenue [2023] VSC 741.

Justice Croft found, in summary, the taxpayer had not discharged its onus of establishing that all the criteria in s67 had been met, and the Commissioner had correctly determined the land was not exempt under s68 of the Land Tax Act.

In doing so, the Court found:

• the land was not primarily used for the business of primary production, owing to the competing uses of the land
• the principal business of the taxpayer was not primary production of the requisite type, because of the various business endeavours of the taxpayer, including land development
• the taxpayer had failed to establish the shareholder of the company was requisitely engaged in the business of the correct type of primary production.

The 2014, 2015 and 2016 land tax assessments were therefore confirmed.

The taxpayer then sought leave to appeal this decision to the Court of Appeal.

Decision – Court of Appeal

On 26 March 2025, the Court of Appeal refused the taxpayer’s application for leave.