Muscat v Commissioner of State Revenue [2025] QCAT 280

First Home Owner Grant and Other Home Owner Grants Act 2000 (Qld)

Commissioner of State Revenue v Taske [2023] QCATA 121

Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 35; (1998) 194 CLR 355

• [1] The Applicant is a cane farmer living in the Mackay region. He purchased a property at 2495 Sarina Homebush Road, Homebush ('the Property') in October 2013 for $1,350,000. It was a cane farm of approximately 298 acres. Not all of the land was under sugar cane cultivation. Structures on the land comprised some old style farm houses. The Applicant's intention was at later date, when finances allowed, to demolish one of the farm houses and rebuild a new house.
• [2] Following cyclone Debbie in March 2017 considerable damage was done to the property and the Applicant decided to start the process of demolishing one of the houses and rebuilding.
• [3] On 19 July 2019 the Applicant entered into a contract ('the demolition contract') to demolish one of the houses.
• [4] On 18 December 2020 the Applicant entered into a contract with Dixon Homes to have a home built on land for $361,740.00.
• [5] On 22 December 2020 the Applicant applied for a grant under the First Home Owner Grant and Other Home Owner Grants Act 2000 (Qld) ('the Act') for funding for a comprehensive home building contract.
• [6] The purpose of the grant was to provide a one-off payment of $25,000 or $15,000 to eligible applicants who build a new home or substantially renovate an existing home where the contract is signed between 4 June 2020 and 31 March 2021.
• [7] On 13 October 2021, the application for the grant was refused on the basis that it was not an eligible transaction as the consideration under the building contract based on the Estimate of Selling Price as at 18 December 2020 prepared by Nutrien Ag Solutions Qld ('Nutrien') dated 8 October 2021 was over the value cap.
• [8] By email on 25 December 2021, the Applicant lodged further submissions, contending he should have applied for the grant on the basis he had a substantial renovation contract. The value cap for a substantial renovation contract which falls under paragraph 20.c. of the Administrative Direction is $1,500,000.
• [9] The Commissioner considered that the requirements for a substantial renovation contract had not been met and did not change its decision.

• [10] The HomeBuilder Grant arose out of an agreement between the Commonwealth and the States, referred to as the 'National Partnership Agreement on Homebuilder' that recognised the mutual interest of the Commonwealth and the States in supporting the residential construction sector to recover from the COVID-19 crisis.[1]
• [11] The objectives of the Agreement were to:

(a) provide a framework to the parties to work co-operatively to support the residential construction industry through the coronavirus crisis and build confidence in the sector over the short to medium term; and

(b) provide financial assistance to eligible owner-occupiers with the intent of increasing residential construction activity and maintaining direct and indirect residential construction jobs.[2]

• [12] The Agreement was to facilitate achievement of the following outcomes:

(a) drive demand for new homes and substantial renovations, supporting increased residential construction activity;

(b) boost confidence in the residential construction sector to help Australia's residential construction sector recover from the coronavirus crisis; and

(c) assist eligible owner-occupiers seeking to build a new home or substantially renovate an existing home.[3]

• [13] The HomeBuilder Grant came into existence after an announcement by the Commonwealth Treasurer on 4 June 2020. A grant of $25,000 was made available to eligible owner-occupiers who build a new home or substantially renovate an existing home where the contract is signed between 4 June 2020 and 31 December 2020.

(a) The building contract was clearly a substantial renovation contract under paragraph 20.c. of the Administrative Direction.8

(b) The grant was to stimulate the economy and help Australian families in times when things were tight. There was no way he would have entered into a building contract without this support.

(c) From the time of the original application on 20 December 2020, 13 months had elapsed with still no support.

• [15] The Applicant supported his application with the following additional material:

(a) Estimate of Selling Price as at 1 July 2019 prepared by Nutrien dated 17 December 2021.

(b) House Demolition Agreement dated 19 July 2019 between the Applicant and Zechariah Bedson ('the demolition agreement').

• [16] At the hearing on 21 November 2024 the issues had narrowed to three items for determination by the Tribunal, they were:

(a) Whether the Building Contract was a "substantial renovation contract" paragraphs 1.c. and 20.c. of the Administrative Direction;

(b) Whether the Applicant paid at least $150,000 of the contract price to the Builder as required by ss 25Q(3)(c) and 25Q(5)(c) of the Act;

(c) Whether the unencumbered value of the land inclusive of all structures, fixtures and improvements was not more than $1,500,000.

• [17] I adjourned the hearing to allow the Applicant to place further evidence before the Tribunal in relation to items (b) and (c). The matter was relisted for rehearing on 16 June 2025 with the parties to file further submissions.
• [18] In its further submissions the Commissioner accepted that the Applicant has paid more than $150,000 to the Builder and therefore he had satisfied ss 25Q(3)(c) and 25Q(5)(c) of the Act. The evidence established payments of $361,740 to the Builder by the Applicant.
• [19] The issues of whether the building contract was a substantial renovation contract as defined and whether the Applicant has satisfied the requirement that the Property meets the value cap under paragraph 6(b)(ii) of the Home Builder Direction remained for determination.

• [20] The Applicant's evidence as to the unencumbered value of the land was:

(a) A Rate Notice of the Mackay Regional Council dated 17 August 2020;

(b) An estimate of selling price of Nutrien dated 8 October 2021; and

(c) An estimate of selling price by Nutrien dated 17 December 2021.

• [21] The Commissioner rejected the Rate Notice as a means of valuation on the basis that it provided no evidence of the value of the structures on the land.[4]
• [22] In an email from the Commissioner's office the Applicant was advised that what was required was evidence that showed the value of the property within three months prior to the date the construction commenced. He was advised that could include a retrospective valuation from a real estate agent or licensed valuer.[5] He was also advised that the valuation should be accompanied by at least three comparative sales.[6]
• [23] The valuation provided by Nutrien dated 17 December 2021 contained three comparative sales but only one preceded 1 July 2019.
• [24] The Applicant provided the following further submissions:

In relation to the valuation submitted from Nutrien Harcourts for the value of $1,093,000 as at 1st July 2019 for Land and Structural Improvements on the property L3 RP704554, the explanation is as follows.

The property was purchased in Oct 2013 for the price of $1350000. This price includes land, Structural Improvements, Crop, Plant and Equipment and Water allocation.

Throughout the process of the application the discussion had with the commissioner's team of what is to make up the valuation price and if it was to include all of the above, we would be outside of the $1,500,000 value cap. As explained to me by the commissioners team it was only to include the Land and Structural improvements hence the supplied valuation.

In regard to the condition of the structural improvements in March 2017 we had significant damage occur to these with the effects from Cyclone Debbie which we received 1177mm of rain for the month of March, with up to 493mm falling in a 24-hour period. This in turn contributed to significate damage to these structures.

In support of this with the condition of the house that was demolished in the separate contract by Zechariah Bedson on the 19th July 2019 it was in a giveaway condition with no money received for the structure.

• [25] To this end, Mr Gary Johns, a real estate agent with Nutrient who initially sold the Property to the Applicant, gave evidence as to the value of the property.
• [26] Mr Johns is not a registered valuer but I am satisfied that he has a great deal of experience in the appraisal of property values in the region and particularly the value cane farms. He, himself, owns a small cane farm in the vicinity.
• [27] Mr Johns valued the property as at 1 July 2019 for land and structural improvements at $1,093,000. He was not asked to value the crop. More particularly he said:

I estimate the selling price of the land area of 120Ha including structural improvements, land only with no cane crop as at the 1" July, 2019, price range area of $1,093,000, comparable sales are listed below...

• [28] Under cross-examination he stated that there was little value in the existing crop of sugar cane. He explained that only part of the land was under cane cultivation. He estimated about 82 Ha was capable of cultivation. The buildings on the property like the farm itself were run down. His description of the buildings was that they were only fit for a bulldozer or a match. There was little value in the land that was not being used for cultivation. It had some cows grazing on it at the time. He advised that it takes five years or so to get a good cash flow and make a cane farm profitable. So, there was little value in the crop that was on the farm. Of the 82 Ha suitable for cultivation one fifth would be fallow at any one time.
• [29] He valued the land that was cultivated at $13,330 per Ha. Prices fluctuate up and down and, by way of example, he advised that at the time of hearing the price was $12,000 per Ha. He did not place any value in monetary terms on the remaining land. Turning that land into cultivation would incur considerable time and expense.
• [30] Consequently, the value of the crop at the time of his estimate he calculated at 60 Ha producing say 80 t/Ha with a sale price of $40 per tonne. On my calculation that would yield a value for the crop of less than $20,000.00.
• [31] It follows that the value of the property with the crop was not very much more than Mr Johns' appraisal and under the $1.5 million limit in paragraph 6.b.ii. of the Administrative Direction.
• [32] The Commissioner criticises Mr Johns appraisal on the basis that:

(a) The selling estimate does not provide evidence of the unencumbered value of the whole of the land, inclusive of all structures, fixtures and improvements. The Commissioner's position is that crops are considered as an improvement to the land and should have been included in the estimate.

(b) The selling estimate is unreliable. The estimate of the Land purports to be as at 1 July 2019. However, two of the three comparative sales from which the estimate is purportedly based were dated after this time: 22 January 2020 and 24 February 2020. The only estimate which is prior to the date is 12 June 2018 (some 12 months prior to the purported estimate date). That land was smaller than the Applicant's land (115.97 hectares whereas the Applicant's land is approximately 120 hectares) and the sale price was $1,200,000. No reasoning is given why a smaller block of land, sold one year prior would yield a higher sale price than the estimate given for the Applicant's land. Even if all three properties were taken into consideration, it is unclear how the estimate was arrived at. The three sale prices were $1,050,000, $1,300,000 and $1,200,000. The valuer's estimate of $1,093,000 is not an average of these three amounts.

• [33] Despite these criticisms, I accept Mr Johns' valuation as the best estimate of the value of the property taking account of the limited comparative sales in the area and find the unencumbered value of the land inclusive of all structures, fixtures and improvements was not more than $1,500,000.

Is the Building Contract a "substantial renovation contract" according to paragraphs 1.c. and 20.c. of the Administrative Direction?

• [34] Paragraph 1 of the Administrative Direction lists the three types of eligible transactions for payment of the grant. The type of eligible transaction for which the Applicant later applied was:

1.c. a substantial renovation contract made by the freehold owner of a home in Queensland if the contract commencement date is between 4 June 2020 and 31 December 2020 (both dates inclusive), and the construction commencement date is on or after the contract commencement date and within 3 months of the contract commencement date or a further period not exceeding 3 months approved by the Commissioner.[7]

• [35] Paragraph 20.c. of the Administrative Direction defines 'substantial renovation contract' relevant to this case as:
  1. is a contract for the building of a new home on the land which replaces a pre-existing home on the land that was demolished under a separate contract entered into by the applicant (the separate contract).

To remove ambiguity for paragraph c., the contract for the building of a new home on the land is the substantial renovation contract, not the separate contract.

• [36] The Commissioner submitted that, in essence, the transaction was considered not to be a substantial renovation contract under paragraphs 1.c. and 20.c. of the Administrative Direction as the demolition agreement, being the separate contract, was not entered into between 4 June 2020 and 31 December 2020 (the eligibility period).
• [37] The Commissioner noted that evidence indicated there was a partly demolished house on the property as at 17 September 2019, and as such, it was evident that the demolition would have occurred prior to 4 June 2020. Indeed, it appears not to be in issue that the contract to demolish the house is dated 19 July 2019 and demolition took place at about that time.
• [38] The Applicant submits it is irrelevant when he entered into the separate contract because paragraphs 1.c. and 20.c. of the Administrative Direction are met as he entered into a substantial renovation contract on 18 December 2020 after the grant was announced and within the eligibility period.
• [39] The Commissioner concedes that paragraphs 1.c. and 20.c. of the Administrative Direction do not clearly specify a temporal requirement with respect to the separate contract. However, the Commissioner submits having regard to the other provisions of the Administrative Direction, a timeframe is implied and crucial; it would be incongruous for there not to be one, and for it to be one other than the eligibility period.
• [40] The Commissioner argues that the only difference between paragraphs 20.b. and 20.c. of the Administrative Direction is that in respect to paragraph 20.c., the demolition of the existing home and construction of the new home must occur under the same contract and, therefore, within the eligibility period. That is obviously so, as it is the one contract.
• [41] The Applicant, in my opinion rightly questions the appropriateness of entering into a new home contract before the existing house has been demolished and the site cleared. I would add that in my opinion that requirement would be unreasonable where both were to be accomplished in time window of the eligibility period of approximately six months.
• [42] The Commissioner further argues that the requirement with respect to the value cap and establishing the unencumbered value of the land under paragraph 4.b.ii. of the Administrative Direction supports the submission. Paragraph 4 provides:

A transaction that is a substantial renovation contract is not an eligible transaction if either or both apply:

a. the consideration is less than $150,000 or more than $750,000;

b. the unencumbered value of the land inclusive of all structures, fixtures and improvements is:

1. for a substantial renovation contract mentioned in paragraphs 19.a. and b. - before the construction commencement date, more than $1,500,000; or
2. for a substantial renovation contract mentioned in paragraph 19.c. - before the existing home was demolished under the separate contract, more than $1,500,000.

• [43] Support for the Commissioner's assertion that the date of the demolition contract ought to be in the eligibility period is found in the HomeBuilder FAQs document which under the heading "Are knock-down rebuilds considered 'renovations?" provides at page 11:

As long as the knockdown occurs on or after 4 June 2020, knock-down rebuilds are considered substantial renovations for the purposes of HomeBuilder. For further information, please see your State or Territory Revenue Office's website.

• [44] However, the HomeBuilder FAQs document is a guide only and has no legislative value.
• [45] The High Court decision of Project Blue Sky Inc v Australian Broadcasting Authority,[8] the majority said:

A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals.[9] Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions.[10] Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other".[11] Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.

• [46] As observed by the Judicial Member in Commissioner of State Revenue v Taske[12] the terms of the Act and the Direction are the sole source of the eligibility requirements to be applied and nothing else.
• [47] The Commissioner argues that the critical time with respect to determining the unencumbered value of the land for a substantial renovation contract under paragraph 20.c. is before the existing home was demolished under the separate contract. The Commissioner submits that without a temporal requirement with respect to the separate contract, situations could arise where assessing the unencumbered value would be assessed at an earlier time when values of real estate may be lower. This, it submits, could make ineffectual or circumvent the purpose of the value cap under paragraph 4.b.ii, given it is reasonable to assume that land values would have been lower in the past. However, the assumption that prices are always increasing is not always the case with cane farms. Mr Johns referred to this in giving his evidence.
• [48] In my opinion the only requirement of paragraph 4.b.ii is that the valuation of the unencumbered value of the land be at a time before the demolition of the existing home. The actual exercise of valuing the property could be carried out after that event. In this case Mr Johns was familiar with the property well before the home was demolished. A further relevant requirement is that the Applicant must be a party to both contracts, both the building of the new home and the demolition of the pre-existing home.
• [49] The Commissioner further argues that importing a requirement of reasonableness creates further interpretive issues. How long should the time between demolition and entry into the contract be? To determine reasonableness always requires some degree of judgement based on relevant facts and circumstances. As stated earlier it is necessary that the applicant is a party to both contracts. As it is intended that the new home must replace the pre-existing home a reasonable time may be contemplated. What might be considered an unreasonable time between demolition and construction would possibly create other difficulties in complying with the requirements of the HomeBuilder Grant, but they do not arise here.
• [50] The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language of the instrument as a whole. The definition of substantial renovation contract in paragraph 20 does not include 'separate contract' which is clearly defined and clarified by the note to the definition. With that in mind it is difficult to accept the Commissioner's submission that the reference to substantial renovation contract in paragraph 1. c. should be construed as including the 'separate contract'.
• [51] In my opinion, for the reasons above, there is no conflict between the provisions of 1.c. and 20.c. I see no basis to imply from the context that the separate contract be entered into in the same eligibility period.
• [52] Therefore, the correct and preferable decision is that the Mr Muscat's application for the HomeBuilder grant should be approved. As a consequence, the Commissioner's decision is set aside and there be a fresh decision allowing the grant.

[1] National Partnership Agreement. Respondent's documents, 371, [3]-[4].

[7] On 29 November 2020, the Australian Government announced an extension of the grant, at a reduced amount of $15,000, for eligible contracts signed between 1 January 2021 and 31 March 2021.

[8] [1998] HCA 35; (1998) 194 CLR 355.

[9] Ross v R [1979] HCA 29; (1979) 141 CLR 432, 440.

[10] See Australian Alliance Assurance Co Ltd v Attorney-General of Queensland [1916] St R Qd 135, 161 (Cooper CJ); Minister for Resources v Dover Fisheries [1993] FCA 366; (1993) 43 FCR 565, 574 (Gummow J).

[11] Institute of Patent Agents v Lockwood [1894] UKLawRpAC 38; [1894] AC 347, 360 (Lord Herschell LC).

[12] [2023] QCATA 121.