Issue
Is a houseboat that is used exclusively by its owners (at weekends and for periods of a week or more during school holidays), 'residential premises' as defined in section 4 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?
Decision
Yes. A holiday home that is used exclusively by its owners (at weekends and for periods of a week of more during school holidays) is 'residential premises' as defined in section 4 of the EGCSA.
Facts
A person owns a houseboat which they use as a holiday home. The owner and their family regularly visit the holiday home at weekends, more so during the summer months, and for extended periods of time, up to several weeks, during school holidays.
The person purchases diesel fuel for use on the houseboat to generate electricity to meet their own domestic requirements. The person does not use diesel fuel to propel the houseboat.
The owner does not rent out the holiday home.
Reasons for Decision
Paragraph 53(4)(b) of the EGCSA provides that an entity is entitled, subject to certain prescribed conditions, to an off-road credit if they purchase diesel fuel for use at residential premises to generate electricity to meet the domestic requirements of the residents of those premises.
Section 4 of the EGCSA defines 'residential premises' as: (a) premises used as a house; or (b) other premises at which at least one person resides but does not include premises used in the business of a hotel, motel, boarding house or a similar business ...
As the holiday home is not being used in the course of a business, it is not necessary to consider the exclusions in paragraph (c) above.
Therefore the houseboat will be residential premises if it is premises used as a house or premises at which at least one person resides.
In Collector of Customs v. Perkins Shipping Pty Ltd (1989) 24 FCR 520, the Federal Court considered whether 'residential premises' could include the living quarters of vessels under the Diesel Fuel Rebate Scheme, the immediate precursor to the Energy Grants (Credits) Scheme.
The Court decided that 'residential premises' can include the living quarters of vessels provided the requisite continuity of association exists between the vessel and crew to constitute the vessel as the crew's place of residence. In that case the Full Federal Court cited with approval the following passage from the judgment of Williams J in Koitaki Para Rubber Estates Pty Limited v. Federal Commissioner of Taxation (1941) 64 CLR 241; (1941) 6 ATD 82; (1941) 2 AITR 136:
The place of residence of an individual is determined, not by the situation of some business or property which he is carrying on or owns, but by reference to where he eats and sleeps and has his settled or usual abode. If he maintains a home or homes he resides in the locality or localities where it or they are situated, but he may also reside where he habitually lives even if this is in hotels on a yacht or some other abode.
In this case the owner and their family eat, sleep and have their recreation time at the houseboat. There is a pattern of regular use of the holiday home over a sustained period of time, combined with regular use of the holiday home for periods of several weeks at a time. Therefore, a requisite continuity of association exists between the houseboat and the owner and their family. Therefore the houseboat is considered to be 'residential premises' for the purposes of section 4 of the EGCSA.