"I'm a Darwinite": Marilynne Paspaley had claimed her Darling Point home as principal place of residence between 2008 and 2012. Photo: Nic Walker

Businesswoman and actress Marilynne Paspaley, of the famous pearling dynasty, once gave a public speech declaring: "I'm a Territorian, and more precisely a Darwinite."

Those words have come back to haunt her, as she lost a bid on Monday to avoid paying tax on a $6.5 million luxury home in Sydney's Darling Point.

Ms Paspaley had argued that she was exempt from paying land tax on the five-bedroom, four-bathroom home on New Beach Road because it was her principal place of residence.

NSW land owners have to pay tax on properties valued over a certain amount, but tax is not applied to a principal place of residence, broadly understood as the place where someone "eats, drinks and sleeps".

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An investigation by the Chief Commissioner of State Revenue found that Ms Paspaley should pay land tax on the Sydney house for the years 2008 to 2012 because she spent the majority of her time living at two different properties in the Northern Territory, where she worked developing hotels. Ms Paspaley objected and took the matter to the Civil and Administrative Tribunal.

Ms Paspaley, also known for playing Dr Tessa Korkidas on the ABC show GP in the 1990s, gave evidence about where her valuable items were kept, where her family spent their Christmases, where she celebrated her 60th birthday and where her bills were sent, in order to prove the Sydney house was where she spent most of her time.

"At all times between 1990 and 2012, New Beach Road was our treasured family home, where we entertained our friends, held our important celebrations and where we could accommodate family and friends who came to visit. This lifestyle and these events did not occur anywhere else in our lives," Ms Paspaley told the tribunal.

"My wedding gifts and all family treasures were held in our family home. It took me many years to decorate it through the collection of valuable antiques and artworks."

However, lawyers for the Chief Commissioner of State Revenue presented evidence including her diaries, bank transactions, travel records and her public remarks, made in a speech at a Northern Territory cultural event in 2005✓, to show she spent the majority of her time in northern Australia.

Senior tribunal member Norman Isenberg found on several counts that the evidence was consistent with the Sydney house being used "as a showplace or trophy home used for entertainment and relaxation". 

"Having regard to the evidence before me I am not satisfied on the balance of probability that the Sydney property was the principal place of residence of [Ms Paspaley] for any of the relevant tax years," Mr Isenberg said.

The Darling Point house was sold for about $6.5 million in late 2012, according to a Domain report from the time.