A troupe of lawyers and a Land and Environment Court judge yesterday took a wander around his extensive $25 million harbourside compound in Vaucluse to help them decide whether he has two properties or just one.

They checked out the three bedrooms, the kitchen and the expansive lounge room of the two-storey "spare house", the agapanthus-filled gardens, the three pools, two garages and harbourside jetty - all with the aim of working out whether Mr Triguboff's consolidation of two properties onto a single title means he can avoid up to $500,000 in land tax each year.

The property tycoon, worth $3.25 billion according to the BRW Rich List, and his wife, Rhonda, have had a "spare" house for the past decade, since buying their neighbour's house for $6 million to bring their total holding to 5200 square metres.

The compound is made up of the original mock Tudor mansion, worth $15 million for its land alone, and the second, more modern, three-bedroom home with a land value of $10 million.

The court heard the second home had an indoor pool where Mr Triguboff swam "several mornings a week" and a bedroom he used as a study on weekends.

It also has a putting green and boatshed, and the garage contains an elaborate pumping system to water the lush gardens.

The compound is in one of Sydney's best streets and is surrounded by homes owned by other property developers.

The Office of State Revenue argues Mr Triguboff can have only one property tax free, not both. The 75-year-old says that since he uses the spare house principally for entertaining and as an extension of the main house, it should not be taxed.

Speaking to the Herald outside his home yesterday, Mr Triguboff said he did not think he should have to pay land tax.

"I think it's so silly, the whole fight," Mr Triguboff said, adding it was clear the compound was one property, not two. "There's no fence, I pulled it down."

Counsel for the Valuer-General said one foolproof way to avoid a controversy over whether someone was liable for land tax when they bought a neighbouring property was to "bulldoze" both homes and "obliterate" the boundary separating the two.

Mr Triguboff argued he used the spare home "as an extension" of the main house, and for "entertaining in a relatively grand manner because of the space which is available there," Justice Peter Biscoe said.

In a written statement to the court Mrs Triguboff said she found it "most convenient to hold private functions … because the area is totally separate from the main house".

"Tradesmen and caterers can access it and pack up afterward with no disturbance to us."

Justice Biscoe has reserved his decision.