Company owned by Mehajer family in court battle to reduce tax bill

SALIM Mehajer has another court battle on his hands with the tax office wanting their share of a reported $4m property windfall.

Salim Mehajer in an Instagram post from Last week. Picture: Instagram

FORMER politician and property developer Salim Mehajer is challenging a bill issued by the tax office to nab a share of a reported $4 million windfall.

A company majority owned by Mr Mehajer, who was formerly deputy mayor of Auburn Council before it was abolished last year, claims there is no profit for the Australian Taxation Office (ATO) to have a share of, Fairfax Media has reported.

The property developer has rarely been out of the headlines in the past 18 months after his lavish wedding ceremony to now estranged wife Aysha Learmonth. Last year, Mehajer family nuptials again stopped Australia when his sister Kat made her own vows at a mansion outside Sydney.

The tussle with the tax office relates to a block in Mary St, Auburn, in Sydney’s west, that has rocketed in value following its purchase by a company majority owned by Mr Mehajer.

The Mary St property has caused Mr Mehajer problems before.

In January 2016, he was suspended for four months from council when it emerged he had voted in favour of rezoning the land around and including the property without declaring his ownership.

Following the rezoning, the parcel of land, which had been purchased for just shy of $4 million, rocketed in estimated value by $1 million.

Mr Mehajer’s suspension, by the NSW Civil and Administrative Tribunal, was subsequently overturned just a month later by the Supreme Court which ruled he had not breached his pecuniary interest obligations. However, by the time the ruling was approved, Auburn Council had already been merged out of existence and there was no chamber for him to return to.

On Monday, Fairfax Media reported that the Mary St property was sold last year for $8 million netting Mr Mehajer’s company a profit of more than $4m.

The ATO wants a chunk of that profit.

But the company says their taxable income for the financial year was zero and the $4.28m windfall should not be counted towards it, the report says.

The Mary St money was not ordinary income and so should be taxed at a lower rate anyway, the company argues.

Mr Mehajer’s company and the tax office are now embroiled in a Federal Court battle to see who is correct. The next round will be in late March.

The developer seems to be taking the court action in his stride.

On the weekend he posted relaxed pictures of himself dining out at restaurants and contemplating life.

News.com.au has contacted Mr Mehajer for comment.