First home buyers beware… stamp-duty concessions and exemptions could be revoked years after your purchase. Photo: Michelle Kroll.
Like many young Canberrans, becoming homeowners was a dream come true for James* and Jane*.
But their dream soon spiralled into a nightmare, thanks to one simple mistake that almost sent them bankrupt.
The couple is among what’s believed to be thousands of Canberrans who have been chased by the ACT Revenue Office (ACTRO) for unpaid stamp duty long after concessions were granted.
The issue was recently highlighted in the Legislative Assembly and the ACT Government has since agreed to review its scheme.
James and Jane spent years saving every possible cent to fund a house deposit. After living with family on a strict budget, they were excited to start a new chapter together.
In March 2024, the couple used ACTRO’s online self-assessment tool to see if they were eligible for the ACT home buyer concession scheme.
Eligibility confirmed, when the perfect property came onto the market, they went for it.
James and Jane were awarded the concession, which saved them more than $22,000 in stamp duty. But six months later, a letter from ACTRO had the couple reeling.
Their concession had been removed, meaning they now owed the property’s stamp duty in full, plus a 25 per cent penalty tax and interest.
The total owed was more than $32,000.
James immediately contacted the couple’s mortgage broker for advice.
Mark Edlund, founder of Clarity Home Loans, says the culprit is a single ambiguous phrase in ACTRO’s criteria.
When James and Jane used the site to confirm their eligibility in March 2024, it read: “… the total gross income of all buyers, including their partners (if any), must not be greater than the relevant income threshold below.”
Mark says the couple, along with others like them who had applied before July 2024, fairly believed “total gross income” meant the same as it did on their yearly tax return.
Mark Edlund says a client who tripped up on ACTRO’s criteria wording early last year ended up owing more than $32,000. Photo: Clarity Home Loans.
On 1 July 2024, the income threshold increased from $170,000 to $250,000.
Following the threshold increase, ACTRO changed the offending phrase from “total gross income” to “assessed taxable income” and included a clear definition for each.
In good faith, James and Jane had declared the incomes shown on their notices of tax assessment, issued by the ATO, which equalled $162,000.
“When ACTRO reviewed their application eight months later, they relied on a revised description of ‘total gross income’ which was updated on the website months after the application was made and not available to them when buying the home,” Mark says.
“It used their incomes before any deductions for legitimate work expenses, which effectively saw ACTRO determine that an income of $170,912 should have been declared.
“Being less than $1000 over the updated interpretation of income resulted in over $8000 worth of penalties, which in my view is a completely disproportionate fine.”
The team asked for a reassessment, supplying detailed evidence, including screenshots that showed the change in wording. This was rejected in January 2025.
James and Jane were left with two options: file for bankruptcy or sell the property and all of their belongings, knowing they may never be able to afford a house again.
“Our government publicly promotes support for first home buyers and the younger generation, yet we were ultimately given three weeks to pay more than $32,000 in full,” James says.
“Realistically, who in our demographic would be able to access that kind of money in such a short timeframe?”
The couple was referred to ACTRO’s debt management team, who James says offered no reasonable support.
“This was caused by a simple, honest mistake that we aren’t at fault for. The expectations placed on us were completely unreasonable,” he says.
“It added immense stress to an already devastating situation that has effectively ruined our financial future.”
Mark says it’s unlikely current buyers will find themselves in a similar dilemma given the criteria update in July 2024, but that doesn’t solve the issue for James and Jane.
“I think it’s ridiculous that our government doesn’t confirm eligibility before granting home buyer concessions,” he says.
“I do agree audits are necessary because there are people who try to cheat the system.
“But James and Jane aren’t those people, and quite frankly, the way they’ve been treated is unjust.”
Mark says the original description of “gross income” is at odds with the ATO’s definition, which states gross income is the starting point for calculating tax liability.
“ACTRO recently scrubbed all traces of the previous description, which we fortunately had taken screenshots from their website,” he says.
“The updated and retrospectively applied interpretation is now being used to go back and target battlers who made genuine and honest declarations in their attempt to realise the most challenging of life’s achievements – home ownership.”
Mark says the applied penalties are morally and ethically reprehensible.
“The fact ACTRO have not only deleted the old criteria and updated it with more detailed explanations to remove ambiguity can only be seen as an acknowledgement by revenue of their complicity in the poorly worded, unclear and vague description in their previous eligibility criteria,” he says.
“The price of the failure by revenue to clearly articulate their concession criteria is now being punitively forced upon many innocent buyers like our clients, who were awarded the concession and lived comfortably in their new home for months before the rug was pulled out from under them.”
Mark continues to support James and Jane in their battle to secure a refund.
In response to Region, ACTRO would not comment on a specific assessment or confirm whether it had removed other home buyer concessions on the same grounds.
* names have been changed for privacy.
