A territory tribunal has found ignorance or confusion about land tax does not prevent a landowner from paying a higher penalty for unpaid rates.
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The ACT Civil and Administrative Tribunal rejected a landowner's request to have his penalty for unpaid land tax between early 2008 and late 2014 reduced from 50 per cent of the outstanding amount to 25 per cent early last month.
A penalty equivalent to 25 per cent of the unpaid tax is the lowest and default punishment, but the Commissioner for ACT Revenue can raise it to 50 per cent if there is evidence the lack of payment was a "failure by the taxpayer ... to take reasonable care to fulfil the ... obligations under a tax law".
The penalty can be reduced if the failure to pay "happened solely because of circumstances beyond the taxpayer's control".
The applicant, who owned a rental property in Giralang but lived in NSW, argued before the tribunal he was not aware of the unpaid tax because the first two notices were sent to a Yass address he was not living at, at the time.
He said he was unaware of differing tax regimes in the ACT compared with NSW, and had hired a state-based accountant to help handle his tax obligations.
Land tax is required for all landowners whose properties are rented and billed each quarter in a financial year, with the percentage owed based on the house's average unimproved value.
According to ACAT's published decision, the commissioner was first made aware of the non-payment in April 2014 but had first sent out a notice in August of that year.
Lawyers acting for the commissioner argued that while they accepted the landowner had not intended to avoid paying the tax, he had "not exercised reasonable care and has no reasonable excuse".
"Mere ignorance of the laws, including issues about the complexity of tax laws or confusion due to different tax laws applying between states, does not justify a reduction of penalty tax and is not a reasonable excuse," they argued.
The commissioner noted rates notices had general information about land tax, and it was the landowner's responsibility to notify the government about a change of address.
Because the landowner had not made a voluntary disclosure before the unpaid tax investigation started, he was not eligible for a penalty tax reduction, the commissioner contended.
The tribunal found that, although the applicant was an honest witness and "was ignorant of his land tax obligations in regard to the property despite engaging a professional", it did not excuse him from liability.
It upheld the commissioner's assessment of payable land tax made last year.
The ACT Revenue Office last year offered a two-month amnesty on penalties for unpaid land tax if the offenders came forward, though they were still required to pay interest on the tax.
The ACT government is expected to collect $93 million in land tax during the current financial year.
