A tax payer has lost a claim for repayment of erroneous land tax payments made to the Commissioner of State Revenue. The Victorian Court of Appeal initially ordered the repayment of sums that represented a double land tax payment for the period 1990-2012.

Upon appeal, however, the High Court of Australia held that that under the Land Tax Act 2005 (Vic), the three year limit on recovery of tax paid operates such that once an assessment is made by the Commissioner, this amount would become a debt payable on the date specified in the assessment. Regardless of whether an assessment would be challenged or that an objection was pending, the tax assessed could be recovered.

This is a harsh outcome, as the court acknowledged that the mistake could not have been discovered by a reasonably diligent tax payer as it was not disclosed on the face of the notice.

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