Peter paid $2.1m for a Sydney substation. A council error has cost him $800,000

An inner west property owner says an error by his local council has left him facing financial ruin after he purchased a historic Newtown electricity substation that was incorrectly listed in official planning documents as free from heritage constraints.

When Peter Mistrevski bought the decommissioned 1931 brick substation on Probert Street in July last year, he believed he had found a rare foothold in Sydney’s property market and an opportunity to convert the site into two homes, living in one and selling the other.

Before committing to the purchase, Mistrevski obtained a planning certificate from Inner West Council in March 2025 stating the property was not a heritage item, was not within a heritage conservation area and could be redeveloped under the complying development pathway, avoiding the need for a full development application.

He said he relied on that certificate, seen by this publication, having it reviewed by his lawyer, architect and town planner as part of his pre-purchase due diligence. He bought the property for $2.1 million at auction.

“I got all the right advice. The planning certificate showed it wasn’t heritage, my town planner and architect looked at it, so I was full steam ahead,” Mistrevski said.

But shortly after dotted lines on contracts were signed, a second planning certificate issued by the council in October 2025 identified the property as a heritage-listed building located within a heritage conservation area that could not be redesigned or developed under the same complying development pathway Mistrevski had planned to pursue.

The listing effectively halted the proposed development and plunged the site into planning and legal uncertainty which Mistrevski says is now costing him $12,000 a month in holding fees, while an independent valuation has put the property at $1.3 million – $800,000 below what he paid.

“The council made a massive mistake on an official document which I relied on to buy the property,” he said.

“I’m now unable to touch the property, modify it, I can’t live in it. It’s sending me bankrupt and [every] dollar I make is going towards the mortgage to keep the bank from repossessing it.

“I tried to make lemonade and I’ve been left with a lemon.”

The dispute is particularly fraught due to the former utility building’s history, with records showing it was constructed in 1931 during a period when substations were built across Sydney to power homes and businesses as the city grew.

In recent years, decommissioned substations have attracted renewed interest from buyers seeking redevelopment opportunities in land-constrained parts of the city, with some small sites selling for more than $2 million despite the planning complexities they can present.

Mistrevski said the heritage listing forced him to redesign his original proposal. A development application lodged at the council in March now proposes retaining the existing substation and constructing a two-storey home behind it.

But he said heritage restrictions had significantly increased costs, with planning and development expenses rising from about $50,000 to $150,000 because of the need to engage specialist heritage consultants on the revised plans.

The application has also undergone multiple revisions in response to council concerns over the scale and bulk of the proposals and its impact on the character of the substation. More than a year after the purchase, the council has yet to determine the application.

The dispute has escalated into a compensation claim against the council, with Mistrevski’s lawyers alleging the incorrect planning certificate caused substantial financial losses, including the reduction in the property’s value and lost development opportunities.

An Inner West Council spokesman said it could not comment on the planning certificate because the matter was subject to legal proceedings.

“The development application is currently being assessed and all normal processes are being followed,” he said.

“More broadly, council is committed to balancing housing needs with protecting heritage.”

Mistrevski said the 12-month ordeal had exposed the risks buyers face when relying on official planning information and argued purchasers should be able to have confidence in the accuracy of council-issued documents before committing to major property purchases.

“Buying a home is the biggest financial commitment most people will ever make and I feel like I’m being punished for a mistake I didn’t make,” he said. “All I’m asking for is a fair go.”

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