$1 million GST waiver benefits new home owners

13 September 2000

Clarendon Homes will waive more than $1 million of claimed Goods and Services Tax charges affecting 208 Clarendon customers after an Australian Competition and Consumer Commission investigation, ACCC Chairman, Professor Allan Fels, said today.

"The ACCC received a number of complaints from Clarendon NSW customers who claimed that Clarendon sales staff had advised them in mid 1999 to early 2000 that the contracts for the construction of new homes was GST-inclusive. The customers alleged Clarendon subsequently invoiced them for an additional amount due to GST.

"The ACCC was concerned that such conduct may be in breach of the misleading and deceptive conduct provisions of the Trade Practices Act 1974. The ACCC raised its concerns with Clarendon and the company agreed to waive the charges totalling about $1.09 million for 208 new home buyers.

"Clarendon has also offered the ACCC court-enforceable undertakings to write to all 208 customers advising them that their GST charges had been waived and also to enter into a trade practices education program to ensure the company's compliance with the Act.

"The ACCC notes that many Clarendon customers had complained to the company before contacting the ACCC. The ACCC is satisfied that Clarendon's recent actions have addressed these customers' concerns.

"The ACCC continues to receive a number of complaints about other home building companies that have sought to levy GST on home building contracts entered into before 1 July 2000. In some cases, customers have alleged that they were told that the contract was GST-inclusive or that the home would be completed prior to 1 July 2000. The ACCC is currently investigating these allegations with a view to taking appropriate action.

"The ACCC calls on all home builders to urgently consider what representations may have been made to their customers, either orally by sales staff or in advertising material, about the effect of the GST on their contracts, including the expected dates for completion of the new home. The ACCC would expect all home builders who have made such representations to honour them. Home builders that fail to honour the representations face not only negative customer reaction but the likelihood of ACCC intervention".

Release number: 
MR 245/00
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