Roozbeh Araghi and Luke Dorsett fight the man and win

johnboy 18 November 2010 17

The Canberra Times informs us that complicated house and land packaging are set to cost the ACT Government millions after a Crace couple had a win in the ACT Civil and Administrative Tribunal arguing that stamp duty should only be levied on the value of the land.

Now the ACT Commissioner for Revenue is assessing the impact of the ruling on thousands of Canberra homebuyers who have bought land and built houses on it in the past few years.

The Government will not say if it plans to appeal the decision, but other buyers of properties in the same Crace development are preparing to launch legal action of their own.

M’learned friends, start your engines.


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17 Responses to Roozbeh Araghi and Luke Dorsett fight the man and win
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GBT GBT 12:21 pm 15 Oct 11

CapitalK said :

So has anyone buying the in terrace had their stamp duty re-assesed or does each buyer have to launch their own legal action to have the stamp duty changed??

I know I had to pay the full stamp duty. There is a spiel on the ACT Revenue Office site saying that until appeals are exhausted etc that house and land purchased via interdependant contracts will be assessed as regular off the plan and thus the full duty is applicable.

CapitalK CapitalK 11:51 am 14 Jun 11

So has anyone buying the in terrace had their stamp duty re-assesed or does each buyer have to launch their own legal action to have the stamp duty changed??

GBT GBT 3:00 pm 23 Nov 10

spark said :

GBT said :

So is the situation the same for all people currently buying as well?

I am buying in Crace and I know the deposit was payable to two separate entities, 10% for the land and 5% for the building, but was told that stamp duty would be payable on the whole amount, some $18,000.

Assumedly, I would only have to pay stamp duty on the land portion.

I’m in the same position too, infact my stamp duty bill is due for payment within a month… I spoke with my conveyancer today, they were pretty hopeless about it.

When I spoke with ACT revenue office they were very very vague about their policies on what consititues the full duty, they were saying that you “can’t buy a block of land without putting a house on it, therefore you are liable to pay duty on the entire ammount” even with seperate contracts. /boggle

If I get out of paying duty, the beers are on me 🙂

So the ACT Revenue Office haven’t sent you a bill with their calculation of what you owe yet?

Let us know how much they calculate it at when you find out.

Jethro Jethro 8:57 pm 20 Nov 10

Deano said :

jensen said :

Yes sorry what I meant was the way they assessed the contracts was unique to Crace

Well, they do say “Crace – changes everything”.

In ultimate irony, googling “crace changes everything” returns

“Crace – Changes Everything
CIC Crace Pty Limited (CIC Crace) reserves the right to make changes to these floor plans (including the changing of the internal layout), elevations and …”

On a COMPLETELY unrelated note to this thread… googling ‘Majura Festival Dickson’ returns

“Illegal brothel and sex slaves in Canberra” third from the top of the list…

JC JC 6:39 pm 20 Nov 10

But let me guess, the terrace houses were designed, approved and built as one complete complex, as opposed to each house individualy? In which case I can see WHY the government had some objections to the way the contracts have been designed.

Never Odd Or Even Never Odd Or Even 12:43 pm 20 Nov 10

Well done to the boys for taking on the government and winning. What happened with Crace was appalling. The terrace houses were strongly marketed towards first home buyers with an emphasis on the two separate contracts for the land and building – the advantage being that stamp duty would apply to the land contract only. This is how the stamp duty was originally assessed, with first home buyers qualifying for the full stamp duty concession and paying $20. What caused all the problems was the clause in each contract making them “interdependent” (one contract could not be completed without the other). This is what ACT Revenue relied on to re-assess everyone’s stamp duty months later and charge on the building contract as well as the land contract. Some first home buyers no longer qualified for any concession at all and had to pay $16,000 – $17,000 more in stamp duty. ACT Revenue’s argument was that the two contracts constituted “one agreement”. ACAT has thankfully seen sense and ruled that although the contracts are linked, they are still two separate contracts with two separate parties and stamp duty should only apply to the land contract.

This whole debacle has been going on for well over 12 months and has put a lot of undue strain on first home buyers. It’s fantastic to finally see a positive result. Having said that, ACT Revenue has another couple of weeks left to appeal, so it might not be all over just yet.

spark spark 9:02 am 20 Nov 10

JC said :

Hang on was this for an appartment or a house? Re-reading post 2 it talks appartments. In which case how does one buy land for an appartment?

It was for a terrace house, House and (very small) land block.

JC JC 4:29 am 20 Nov 10

Hang on was this for an appartment or a house? Re-reading post 2 it talks appartments. In which case how does one buy land for an appartment?

spark spark 8:43 pm 19 Nov 10

GBT said :

So is the situation the same for all people currently buying as well?

I am buying in Crace and I know the deposit was payable to two separate entities, 10% for the land and 5% for the building, but was told that stamp duty would be payable on the whole amount, some $18,000.

Assumedly, I would only have to pay stamp duty on the land portion.

I’m in the same position too, infact my stamp duty bill is due for payment within a month… I spoke with my conveyancer today, they were pretty hopeless about it.

When I spoke with ACT revenue office they were very very vague about their policies on what consititues the full duty, they were saying that you “can’t buy a block of land without putting a house on it, therefore you are liable to pay duty on the entire ammount” even with seperate contracts. /boggle

If I get out of paying duty, the beers are on me 🙂

Deano Deano 11:49 pm 18 Nov 10

jensen said :

Yes sorry what I meant was the way they assessed the contracts was unique to Crace

Well, they do say “Crace – changes everything”.

In ultimate irony, googling “crace changes everything” returns

“Crace – Changes Everything
CIC Crace Pty Limited (CIC Crace) reserves the right to make changes to these floor plans (including the changing of the internal layout), elevations and …”

JC JC 6:10 pm 18 Nov 10

toriness said :

i have friends who bought a house and land package in watson and only paid stamp duty on the land too – so it can’t just be a unique crace deal.

That is indeed possible. The difference being you buy the land and pay stamp duty, then enter into a building contract with a builder to build the house, where stamp duty isn’t payable. I did this back in 2000. My solicitor did something else that was a bit cleaver. I brought the land in late June, which is before the GST came in, so payed no GST on the land, then entered into the building contract on 1st July, which mean I was eligible for the first home buys grant. Had I entered into the building contract the day before I wouldn’t have got the grant, but as the house construction would take place later GST would be payed anyway.

Don’t fully understand the situation in Crace, sounds like someone found a loophole, especially if the initial bit of stamp duty was only $20!

GBT GBT 2:34 pm 18 Nov 10

So is the situation the same for all people currently buying as well?

I am buying in Crace and I know the deposit was payable to two separate entities, 10% for the land and 5% for the building, but was told that stamp duty would be payable on the whole amount, some $18,000.

Assumedly, I would only have to pay stamp duty on the land portion.

jensen jensen 2:19 pm 18 Nov 10

toriness said :

i have friends who bought a house and land package in watson and only paid stamp duty on the land too – so it can’t just be a unique crace deal.

Yes sorry what I meant was the way they assessed the contracts was unique to Crace

toriness toriness 1:33 pm 18 Nov 10

i have friends who bought a house and land package in watson and only paid stamp duty on the land too – so it can’t just be a unique crace deal.

p1 p1 1:08 pm 18 Nov 10

jensen said :

Months down the track the revenue office ‘reassessed’ all of the buyers at Crace and decided that the two contracts were now one contract making the $20 bill jump to almost $17,000.

WOW! No wonder they took it to court.

jensen jensen 12:56 pm 18 Nov 10

Indi said :

I’m questioning why this concept shouldn’t apply to paying for an apartment off the plan…

Because the contracts for Crace were unique. They split the purchase up into two distinctly different contracts (1 for the land with the LDA, and 1 for the building with the Crace developers). When you buy an apartment off the plan it is without a doubt one contract. Usually when you have two contracts you pay stamp duty on the land only. That was the understanding when people purchased at Crace in the first release based on the advice they received from Crace, the revenue office and their solicitors. People submitted their stamp duty forms (and concessional stamp duty forms if eligible as first home buyers) and paid the required bill. For most (including myself) that bill came to $20. Months down the track the revenue office ‘reassessed’ all of the buyers at Crace and decided that the two contracts were now one contract making the $20 bill jump to almost $17,000.

Good on you guys for taking this all the way. There are many first home buyers that were put in a very tight position that will benefit from your efforts.

Indi Indi 11:35 am 18 Nov 10

I’m questioning why this concept shouldn’t apply to paying for an apartment off the plan…

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