Sydney - how far off UCV land valuations are from market value

The rated land value is apparently derived from actual market data by professional valuers contracted by the NSW valuer general. Look at this example below - 4.3m market value vs 1.63m rated value. Wow!



Yes I'm aware UCV valuations are 'for purpose of calculating rates' but they really should also reflect actual market value, and then the rates coefficient be adjusted down if it's excessive as a result - the current approach is inaccurate (i.e. rated land values artificially low to achieve the desired rates)

 

I guess the answer is "depends" on a myriad of variables, but UCV is usually substantially below market value...

 

Mass valuation method is far from perfect and hinges on numerous factors..
If the valuations of land is accurate the government appears predatory/revenue raising, hence a conservative approach.
Note assigned land values by the VG and land values determined for mortgage purposes will display a notable difference.

 

It makes sense, the government wants its share (land tax) but still wants people to invest speculatively. Increasing the land tax along with market value would simply stop the housing market in its tracks, can't have that happening

 

I would ask the question in reverse. Should one invest in property which the sales price is very close to the gross/net land value? If one can buy a property with large land component very close to the gross land value, does it mean it has the potential to good gains in future?

Or there is an intrinsic reason why sales price is very close to gross land value?

 

personally that’s exactly what I’d aim for.. if you can pick up a block at land value that’s a year or two from being Re-rated in a moving market (rare but have seen it) A lot of unsophisticated buyers will take rating value as gospel

 

Gross/net land value??
Are you referring to improved/unimproved land value??

 

I was referring to the photo of OPs. Unimproved land value in my dictionary, yes.

 

Recently got land tax for Sydney units, and it shows on the last page land value down a good 10% for inner city / inner East subs. Almost a 4 digit savings so happy with it (now that property prices have more than recovered), this year and next 2 with the 3-year average. But it shows it has some correlation with market values, on the way up and down. Next year might be a different story though!