Lessons from Makrylos v FCT [2023] FCA 971


A recent court case, Makrylos v FCT [2023] FCA 971, has important lessons for anyone involved in property development. This blog breaks down the key points of the case and what it means for property developers, whether they’re seasoned or just starting.

Overview of the Makrylos Case:

In simple terms, the court had to decide how to treat land bought by a property developer. They said the land should be considered as “trading stock” from the day it was bought, not from a later date the person wanted. This decision affects how profits are calculated, what costs can be claimed, and when these claims can be made.

What the Court Looked At:

Original Price vs. Market Value:
– The court decided that profits should be based on the original price of the land, not how much it was worth when the developer started working on it.

What the Buyer Planned to Do:
– Even if the buyer lived on the land sometimes, the court focused on what the person planned to do from the beginning. If the plan was to use the land for business, that was more important than occasional personal use.

Experience of the Developer:
– The fact that the person was an experienced property developer and did things like splitting the land influenced the court. Even if someone isn’t a regular developer, the outcome might be similar if the land was bought to make a profit in a one-time deal.

Having Proof:
– The case showed that having clear proof of why the land was bought is crucial. Just living on it or renting it might not change things if the original plan is well-documented.

What Property Developers Should Take Away:

Get Professional Advice:
– Before buying land for development, it’s smart to talk to experts in taxes and law. They can help understand the rules and plan things right.

Keep Good Records:
– Having clear documents that explain why the land was bought is super important. This can help a lot if there’s ever a disagreement with tax authorities.

Think About Personal Use:
– Property developers should be careful about using the land personally sometimes. The court might focus more on the original business plan than occasional personal use.


The Makrylos case teaches property developers that understanding tax and legal rules is key. Seeking advice from professionals and keeping good records are crucial to avoid problems. As the property development world changes, staying updated and getting the right advice will help developers succeed in this complex field.