The Land Development Agency bought $7.5 million worth of rural land at Mount Stromlo on its final day of operations on June 30 this year, despite an audit probe already underway into such acquisitions.
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Planning officials told a Legislative Assembly committee on Monday the purchase was a "strategic acquisition", but three months on, they did not actually know what the property, known as Winslade, would be used for.
The land acquired is west of Wright and Duffy, bordered by the Murrumbidgee River to the west and Cotter Road to the south and includes Stromlo rural blocks 435, 439, 440, 441, 456 and 476.
Housing minister Yvette Berry approved the purchase, which was settled on 30 June this year, a day before the LDA was abolished and succeeded by the City Renewal Authority and Suburban Land Agency on July 1.
The territory's Auditor-General was already investigating a series of LDA rural land buy-ups totalling more than $20 million for 2015-16, a probe that officially began in May and is still on foot.
It remains unclear if the Winslade purchase was assessed by Cabinet, as was required under the then-acquisitions policy framework for acquisitions totalling more than $20 million in any single financial year.
But planning officials confirmed Ms Berry had approved the purchase under the LDA's land acquisition policy framework, a purchase made on the final day that framework was operating.
Greens MLA Caroline Le Couteur, Opposition leader Alistair Coe and deputy leader Nicole Lawder asked a series of questions about the purchase on Monday, including why the government bought it.
Planning directorate director-general Ben Ponton told the committee that "it would appear that the former LDA board has taken the decision that it would acquire the land" to "provide flexibility for future years".
But he said that "work still needs to be done to determine what would be the best use of the land".
While he said it could be used for residential development, it could also be used for environmental offsets for the development of other areas, but such decisions had not yet been made.
Suburban Land Agency executive director greenfields Tom Gordon, who previously held a similar role at the LDA, said the property owner had "approached myself" with the offer to sell the land to the government.
He said the previous LDA board were "looking at strategic options" and the owner sought to sell the land and "had made that known to the LDA".
Mr Coe asked if that was the same case with the LDA's purchase of a $4.6 million rural Belconnen property, which settled under the SLA under the LDA's old acquisition rules.
Mr Gordon said the owners of that property, Pine Ridge, had approached the "previous CEO of the LDA" with a similar offer to sell the land to the government.
"Is that how it works, do people just contact the LDA and say I've got a block to sell, do you want to buy it?" Mr Coe asked.
"Yes," Mr Gordon said.
Comment was sought from Ms Berry's office before filing.
