I'm curious if this is a normal thing. I put down a 0.25% deposit on a vacant block of land. The agent said $500k was the price and we agreed on it. My solicitor reviewed the contract and found that GST is added on top. The agent was misleading and did not disclose that the price is now $550k. I thought if you buy a house or land the price you agree on is the final price but apparently they can add more on top. If I pull out of cooling off I lose my 0.25%, but then if I stay I have to pay an extra 50k.
Perhaps your solicitor was negligent if they didn't advise you on this before signing. Was there any special conditions about GST?
It’s highly unlikely you’ll have any recourse against the agent. The contract is no doubt clear on how GST is to be dealt with. You should speak with your solicitor if they didn’t advise you on the GST before you signed.
Is this common in Victoria? i.e. if I see a vacant block for sale for x amount, should I assume I need to add 10%?
Good example of why you seek legal advice BEFORE signing anything. However Australian Consumer Law (ACL) does not allow GST to be added to a contracted price. The contract price may include GST or not but it doesnt change the price. Its illegal to indicate a price and then include terms or fine print that add GST. Many states have different ways to ensure this is clear and compliant. In Victoria the standard contract includes a GST clause (general condition 13) that clearly specifies the GST in this box : GST (general condition 13) The price includes GST (if any) unless the words ‘plus GST’ appear in this box: Link to this doc : https://www.consumer.vic.gov.au/lib...ts/sample-contract-of-sale-of-real-estate.doc Hence if the page says "plus GST" its very simple to understand. However if the agent was selling the property by mention of $500,000 then a breach of ACL may have occurred leading to the making of the contract. Its misleading and deceptive conduct and may be enforceable either under state or Commonwealth law. Often its easier as a state matter as the REA is regulated by Fair Trading who administer regulation of state consumer law. If the property was advertised or promoted for $500K and then the contract says $500K and PLUS GST then there is a problem. I would be surprised. It may mean that the contract is capable of being terminated without any penalty rather than enforcing the $500K price. However if you merely thought the price was $500K and signed and then sought legal advice that drew attention to the PLUS GST clause then its your mistake
Not normal at all in WA. Normally (in WA) the contract for land (or a house) will be GST inclusive but will still indicate how GST it to be treated by the Seller (being sold under Margin Scheme etc) and the Buyer will sign again in this section to say that you understand. Land estates will generally have something like this in their pages and pages of extra contract information but the price is still inclusive of GST Commercial contracts are generally plus GST.
Care to upload the paperwork without any indentifying details? I'm very curious about this one as I don't think I've seen a non obvious GST exclusive sale.
