State Government valuations of your property – not always black and white

Statutory land valuations are the basis for the calculation of:

• Land tax
• Council rates
• State leasehold rents.

How are the valuations decided?

Generally:

• All land is valued based on a freehold value, even if it is leasehold.
• Each legal Lot is valued, although the Valuer-General also has the power to declare particular parts of a Lot as being treated separately for the purposes of valuation (Declared Parcels). For example, this may be considered appropriate if there is a leasehold interest granted over part of a property.
• Non-rural land is valued based on its “site value”.
• Rural land is valued based on its “unimproved value”.
• “Site value” includes works done to the land to prepare it for development (i.e. clearing of vegetation, improving, levelling and compacting of soil, and underground drainage), but does not include excavating the land for a particular intended construction, nor does it include buildings on the land.
• “Unimproved value” is the expected realisation of an arm’s length sale, on the basis it was in its original unimproved state (i.e. land clearing, improvising, levelling and compacting of soil, and underground drainage are not included).

This is a general outline only – the methodology can vary for each property, and particularly in the case of leasehold property.

So once a decision is made, is it final?

No – you can object to an annual or maintenance statutory land value, however:

1. This must be done within 60 days of you receiving your valuation;
2. You must provide sufficient information to demonstrate the valuation is incorrect – usually we would expect that this would include valuation prepared by a registered valuer (using the same methodology as required under the Land Valuation Act); and
3. Include other required information.

Valuer-General v Suncorp Metway Insurance Pty Ltd

Most commonly, an objection to a statutory valuation will based on an alternative valuation that is provided by a registered valuer engaged by the land owner.

However, a recent court decision has highlighted a significant legal error made by the Valuer-General in carrying out a maintenance valuation.  In summary:

• Suncorp had had 3 State leasehold interests (the Lease) of areas above Central Station, Brisbane (originally the Sheraton Hotel). These commenced in 1986.
• In 2007, the description of the area including the Lease changed. Following this change most of the land under the Lease fell within part of Volumetric Lot 2 on Survey Plan 140773 (Lot 2), but some also fell within part of Lot 6 on Survey Plan 140772 and some within part of Lot 11 on Survey Plan 165989.
• To assist in administering land valuations, the Valuer-General assigns its own property identification numbers (Property ID) in a database called QVAS.
• At some point in time, the Valuer-General’s Property ID for the Lease showed all of Lot 2 as being leased to Suncorp. This led to a maintenance valuation notice being issued for an area greater than was actually included in the Lease.
• Suncorp also objected as the Lease was only over part of a Lot (rather than the whole Lot), the Valuer-General had not declared the parts of each Lot comprising the Lease as a “declared parcel”.
• The Land Appeal Court determined that despite any internal mechanism the Valuer-General’s office had for assigning Property IDs, it did not have the power to issue valuations with respect to part of a Lot unless it was a “declared parcel”.
• Ultimately, the valuation notice was declared invalid.

This article is intended as general guidance only – statutory valuations and particularly those concerning leasehold land are not straightforward, and regard needs to be had to the particular property and correct methodology. If you have a concern about a statutory valuation you should always seek legal advice as soon as possible and in any event before the end of the 60 day objection period.

Please contact me regarding State Government valuations of your property or any property related queries.