WHEN it comes to mainstream advertising, consumers are accustomed to screening messages to separate fact from fiction.
WHEN it comes to mainstream advertising, consumers are accustomed to screening messages to separate fact from fiction.
In the property industry, however, adhering to the letter of the law when it comes to advertising the price of a piece of land or building isn’t always clear-cut.
The Australian Competition and Consumer Commission (ACCC) is keeping a close eye on advertising practices – and that includes
those of the property industry.
Misrepresentation is one of the key issues for the ACCC, however it appears the goods and services tax (GST) may be at the heart of some serious concerns.
The ACCC has released a publication called Fair and Square to guide real estate agents when it comes to advertising and marketing property.
The GST has created a situation where a property can sell at a number of different prices, depending on the status of the buyer, and this can create difficulties.
At the heart of the matter is the question: which price should a real estate agent or vendor advertise?
PricewaterhouseCoopers senior manager Karen Dill-Macky said there was a number of different ways the GST affects the price of a property.
“It could be fully taxed, it could be GST free or it could be offered on the margin scheme,” she said.
“That means each would have a different price.
“When it comes to advertising, the Trades Practices Act says you’ve got to show the full GST-inclusive price, but for different people that could be different prices.”
The last thing real estate agents want is for the ACCC to come down on them for misrepresenting a property.
Ms Dill-Macky said agents were very confused about marketing property with the GST.
“All in all it’s also an incredibly confusing area for people buying land,” she said.
“I don’t think agents are being deliberately deceitful, there’s just the temptation to use the best price.
“The industry is asking the ACCC for direction because it’s a big issue for all land developers.”
The ACCC has not made any statement in relation to advertising beyond the requirements of the Trades Practices Act.
ACCC regional acting director Sam Di Scerni said the commission was looking to update its publication relating to advertising property.
“It’s an oldish publication that was put out in about June 1994,” he said.
“We’ve also recently issued a publication called Advertising and Selling.
“There are a few problem areas in relation to the property industry. One is claims in respect to characteristics of buildings, which can be vague.”
Rather than a focus on the GST, however, the issue of caveats in developments is a much bigger issue for the ACCC at the moment.
“The caveats relate to laws restricting the development potential of a site or things like heritage laws protecting the development,” Mr Di Scerni said.
“Advertising material has to include all the caveats.
“This is particularly important in pre-contract negotiations.
“If the misrepresentation is significant the buyer can get the contract overturned.”
In the property industry, however, adhering to the letter of the law when it comes to advertising the price of a piece of land or building isn’t always clear-cut.
The Australian Competition and Consumer Commission (ACCC) is keeping a close eye on advertising practices – and that includes
those of the property industry.
Misrepresentation is one of the key issues for the ACCC, however it appears the goods and services tax (GST) may be at the heart of some serious concerns.
The ACCC has released a publication called Fair and Square to guide real estate agents when it comes to advertising and marketing property.
The GST has created a situation where a property can sell at a number of different prices, depending on the status of the buyer, and this can create difficulties.
At the heart of the matter is the question: which price should a real estate agent or vendor advertise?
PricewaterhouseCoopers senior manager Karen Dill-Macky said there was a number of different ways the GST affects the price of a property.
“It could be fully taxed, it could be GST free or it could be offered on the margin scheme,” she said.
“That means each would have a different price.
“When it comes to advertising, the Trades Practices Act says you’ve got to show the full GST-inclusive price, but for different people that could be different prices.”
The last thing real estate agents want is for the ACCC to come down on them for misrepresenting a property.
Ms Dill-Macky said agents were very confused about marketing property with the GST.
“All in all it’s also an incredibly confusing area for people buying land,” she said.
“I don’t think agents are being deliberately deceitful, there’s just the temptation to use the best price.
“The industry is asking the ACCC for direction because it’s a big issue for all land developers.”
The ACCC has not made any statement in relation to advertising beyond the requirements of the Trades Practices Act.
ACCC regional acting director Sam Di Scerni said the commission was looking to update its publication relating to advertising property.
“It’s an oldish publication that was put out in about June 1994,” he said.
“We’ve also recently issued a publication called Advertising and Selling.
“There are a few problem areas in relation to the property industry. One is claims in respect to characteristics of buildings, which can be vague.”
Rather than a focus on the GST, however, the issue of caveats in developments is a much bigger issue for the ACCC at the moment.
“The caveats relate to laws restricting the development potential of a site or things like heritage laws protecting the development,” Mr Di Scerni said.
“Advertising material has to include all the caveats.
“This is particularly important in pre-contract negotiations.
“If the misrepresentation is significant the buyer can get the contract overturned.”
