Millions of dollars in stamp duty reaped by the ACT government on house and land packages on the city's outskirts in recent years have been thrown into doubt by a court decision.
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The ACT Supreme Court has upheld a decision that reduced the stamp duty bill for a young Gungahlin couple's starter home from nearly $17,000 to just $20.
The judgment by Supreme Court Justice Hilary Penfold to dismiss the government's appeal could open the floodgates to a torrent of litigation from buyers who bought house and land packages in Canberra's north under government affordable housing schemes before 2011.
The government's Commissioner for Revenue's office said on Thursday it was considering whether to pursue its appeals against the decision.
In her decision handed down on Thursday, Justice Penfold upheld a Civil and Administrative Tribunal ruling in favour of the couple who claimed the territory could only impose stamp duty on the land worth $80,000, not the whole $430,000 house and land package.
The decision slashed a stamp duty bill of nearly $17,000 to just $20 after the reduction left them eligible for a first home buyers stamp duty concession.
The court upheld the tribunal's view that the house should not be taxed because there were separate contracts, with separate parties, to buy the land and build the home. It also awarded costs against the government.
Roozbeh Araghi and his partner Luke Dorsett bought a house and land package at the Terrace Development at Crace, a joint venture between the Land Development Agency and builder CIC, in April 2010 after queuing overnight to secure their place in the estate.
The couple, both public servants, took their case to the tribunal the following year, saying they had been assured by Treasury officials they would be entitled to pay the concessional rate of stamp duty, which was $20. However, they were billed $16,800.
But the case was decided on a point of contractual law, and not the verbal assurances, both in the tribunal and the subsequent Supreme Court appeal.
Treasury hired one of Australia's top taxation law experts, Sydney barrister Roger Hamilton, SC, who charges thousands of dollars a day, to argue its case.
The couple's lawyer, Allan Nelson of Nelson & Co Solicitors, said on Thursday he was confident Justice Penfold's decision would withstand any further court appeals.
"It's a good result and a well-deserved result," Mr Nelson said.
"We think we can hold it on appeal but we're hoping we won't have to and that the government accepts the result this time.
"If anyone else is in the same boat, then they would be entitled to a refund, I would imagine."
Mr Araghi said he and his partner were "thrilled" with the result.
"We hope at this stage that the Revenue Office will abide by the umpire's verdict," he said.
An ACT Treasury spokesman said the government was considering its position.
"The ACT Commissioner for Revenue is considering the decision of the Supreme Court," the spokesman said.
"In due course, the commissioner will make a decision on action - if any - that might be taken regarding the decision.
"In the interim, the ACT government will not be commenting further on the Supreme Court decision."
