ACCC resolves misleading GST property claims

"The Australian Competition and Consumer Commission has accepted court-enforceable undertakings from Golden Miles Pty Ltd, a real estate and investment agent, over a representations about the effect of the New Tax System on the prices of residential apartments", ACCC Chairman, Professor Allan Fels, said today.

"The ACCC alleged that Golden Miles made oral representations to prospective purchasers of residential apartments that the value of these properties would increase by 10 per cent on the introduction of the Goods and Services Tax. However the increased supply of apartments in many capital cities will mean that property price increases are likely to be significantly less than 10 per cent.

"The Australian Competition and Consumer Commission has accepted court-enforceable undertakings from Golden Miles Pty Ltd, a real estate and investment agent, over a representations about the effect of the New Tax System on the prices of residential apartments", ACCC Chairman, Professor Allan Fels, said today.

"The ACCC alleged that Golden Miles made oral representations to prospective purchasers of residential apartments that the value of these properties would increase by 10 per cent on the introduction of the Goods and Services Tax. However the increased supply of apartments in many capital cities will mean that property price increases are likely to be significantly less than 10 per cent.

"The ACCC has been vigilant in relation to representations made by property sellers about the effect of the GST on prices due to the significant consumer detriment, totally many thousands of dollars, which can result from such misrepresentations".

Gold Miles has undertaken to cease making representations that:

• the price of property will increase by 10 per cent by July 2000 from the value of the property at the date of the agreement to purchase is signed because of the GST;
• GST of 10 per cent will be levied on property after 1 July 2000 where it is possible that the effect of the New Tax System will be an increase of less than 10 per cent; and
• the introduction of the GST will lead to an increase in the value of property of 10 per cent allowing owners of a similar property to increase sale prices by 10 per cent.

Golden Miles has also undertaken to implement a trade practices compliance program.