Challenging Land Valuation

Hi all

I am seeking views on what arguments have worked in getting NSW Land valuations down to ensure I am not missing an angle.

I am pushing back on the basis that the current valuation:

• Is not in line with the sales cycle in the area (land value gone up 15% but sales values static)
• Is not in line with value of my property given a static land improvement base (bought at x, when land value was judged at y; now have gone through a sales campaign and have received an offer of z, but the land value is way more than z less x-y)
• The valuer has used falsely inflated land values in their calculation. Adjusted land values were all pushed up by 20% compared to their most recent assessment at the point of sale!

Thoughts? Any (other) reasons that anyone on here have used successfully?

 

1. There is a small window of opportunity to object to the valuation
2. Valuation date is 30 June, assessment date is 31 December, so by the time you see your bill the window has closed
3. Valuations are for land value, how have you determined that the adjusted land values have been overinflated? Values for the assessment are averaged over 3 years to minimise any spikes
4. Have you discussed your chances with a valuer?
5. Have you gone into the SVO website to determine which properties were used subjectively in determination of the LV for your property?
6. How big a saving are you expecting (a change of $10k will result in a $160 difference in land tax assessed)

 

Hi Scott

I am seeking experiences of those who have gone through the process personally on this forum to establish the best path to success. That said, happy to answer your questions and share my experience so far.

I spoke with the Valuer’s Office. They advised that where circumstances exist the 60 day window can be overlooked. They encouraged me to seek a re-assessment for all three years in scope.

When I advised that I will do so, they shared, amongst other docs, a list of sales considered in reaching my own property’s valuation.

I have determined that the most comparable sale was inflated by using a similar method I described above. The same property was sold a few years back, land improvements valued at x, at the more recent valuation, all of a sudden the land improvements are now 40% less and the remainder moved to land value. Further, the value of that parcel is 20% higher than all the neighbouring parcels. Yet that specific sale was used to determine my land valuation. Seems unfair.

I haven’t discussed with a valuer, that said, keen to hear if this path yielded success for anyone on the board.

Finally, I am looking at looping off at least 100k (c.10%) off each of the three years’ on average which for me would generate a 2k saving now and hopefully in perpetuity.

 

It will be of value to engage a registered valuer to review your valuation.
I have probably spent in excess of $20k on valuers (over the last couple of years) and I believe it is money well spent.
If you are expecting those savings then the money spent on a valuer will be will worthwhile.

 

The same property was sold a few years back, land improvements valued at x, at the more recent valuation, all of a sudden the land improvements are now 40% less and the remainder moved to land value.
Who stated this is what happen ?
This is not what I believe happen because Land improvements are seldom valued ..the property is , the land is, but the improvements is merely the difference ie the improvement in the value by having a building on the site

 

Hi Beano

I take your point about land improvements, but if I can’t argue that, the whole land valuation also has no basis. Which means that the Valuer General’s valuation has a fairly weak basis, too.

Around my property there are let’s say 10-12 very similar ones. So if they value one’s land at 20% more than the others, what’s the basis for that other than setting up a future land tax income stream for the government? Then they use that higher valuation to justify inching up the others around it. On what basis?

My basis is - if at one stage they valued a whole bunch of land at x, therefore implying the land improvement value at y because the market value of property sold is x+y, how could they argue a couple years later that y could be 40% less and x that much (and more) higher?

There’s a danger this is turning into a rant so I’ll stop... Any valuers with experience in this type of thing?

 

Have you addressed any of the considerations under the Act?

Is your zoning the same as the surrounding land?

 

The valuation methodology is they take a parcel of generic land in a specific location and value the meterage on this "standard" for its unimproved value. They dont individually value land. They apply this to most (not all) land in that limited area.

If your land has a characteristic that makes it different then the value may be excessive eg a massive rock in the centre of the lot etc. Or it may be affected by a legal issue with the land , zoning or restrictions on use etc

Sales values have little bearing on unimproved land values since in most cases land has things upon it. That are ignored.

 

I have an issue in Melbourne. I am looking to purchase a property that states in transfer on land title it can only permit a single dwelling. I am going possibly going to challenge this but this involves sending out 352 letters to neighbouring lots. The cost involved could be up $6000 and if one neighbour objects I can not proceed with removal of covenant. Is this deemed as capital works and can it be depreciated?

Also do you think I could question the land value as this block is undevelopable and hence worth less than they value?

Thanks,

 

What is the land value of each of the other 352 lots in the subdivision? If they're close to yours, no chance.

 

Well the ones that don't have the covenant will be more expensive. You can only tell that though by reading the contract of sale and plans. Desktop evaluation will all look like the same blocks...

 

It is capital expenditure. It is a CGT cost and becoems a element of the costbase (4th element) which may reduce a future gain (or profit) on the land / dwelling etc. It is not depreciable.