Who just received their latest land tax notice?

I just got my land tax bill.

Despite not buying a single additional property in Victoria in the last year, my land tax bill increased 55%. Yep, that is not a typo. 55% increase compared with last year. Artefact of the vicious progressive scales (top rate is x10 the bottom rate) and the bracket creep governments love so much. And Victoria rarely if ever adjusts thresholds.

And for the first time since receiving these bills, the land values look inflated given the ~10% and more drops we have seen in parts of Victoria.

I am going to object.

 

It's doubtful your objection will get anywhere as the values aren't based on the current value but rolling values of the last 3 years. You need to read how it's calculated and you'll see that there is lag to the values that you would have enjoyed at the beginning of the rising market when the value would have been less than what it was worth and is now possible more than it was worth.

 

In Victoria, the rates are based on a valuation in 2018. It is not rolling values over 3 years.

 

I honestly thought something fishy was going on so didn’t want to speak up. Rose 60% here, making it tougher to hold, shares look better every minute of everyday

 

In my view, the valuations have always lagged. In this case, the 2018 amounts look high, given correction that has occurred last 18 months. Noting of course values based on the land value and not the capital improved value.

 

The thing that annoys me is that land rate values continued to go up in 2018 and 2019 when prices in Sydney have not. In 2014 my land value was well under half the sale value. Now it is over half (and that's not taking into account the recent drops). So seeing prices are falling does that mean land values will be adjusted down over the next few years?

 

Quite possibly but depending upon how big a decrease is experienced on the valuation date, the effect of the averaging over the 3 years and whether the threshold is adjusted up or down will determine whether you will pay more or less land tax next year.

 

31st december or when?

 

Yes. Its AT a specific date. Values may have since changed

 

Mine just went up 70%, and based on the rolling 3 year calculation the tax will have doubled in 2 years by next year.

Their land valuation is now over 80% of the property value which doesn't seem right. An expensive sale of a mansion on a smaller block in the same street last year probably didn't help. Maybe worth a protest, don't know.

Unusually, I'd like prices to go down as I don't ever plan on selling this place.

 

Also objecting. Very inflated valuation from council.

 

My sense is that the values are 10% above the market for the land value. Arguably more in some cases. In one suburb, prices haves come back by 15%, and that is not reflected in the values. Valuations seem to be based on prices as they were 18 months ago.

 

In my case it's 18-month-old prices plus about a 10% premium.

 

No hike here for the first time in many years. Property is in Sydney's Hills district.

 

Council has nothing to do with the process - refer to the State Valuation Office

These are based on a 3 year rolling average, so 18 months would be about right.

What makes your property any worse than those that they have considered to be comparable? Easements? Train line? Opposite Main road? Under a flight path? Subject to road widening? Odd shape not permitting maximum development?

 

Valuations will always lag a actual market. This is a feature of the Land Tax Act. It cant be objected to. The valuer general doesnt revalue each year and the land tax act doesnt containa protection mechanism in Vic like the 3 year smoothing in NSW which was introduced to address this problem.

Land valuations | State Revenue Office says :

While we are not involved in the site valuation process, we use these valuations to calculate land tax. The most recent valuation year was 2018, so we have used the 2018 valuations to calculate land tax in 2019.

 

In Victoria, up until July last year valuations were done by council (most recently January 2018 I think), and that's what my current land tax assessment is based on.

From July 2018 is been centralised with the Vic gov valuer general. In Vic it's a point in time assessment not a rolling average.

Point is, at least in my case they've used an incredibly optimistic 2017 valuation. Anyway, I'll see how I go. I've objected in the past with some success.

 

Councils no longer value land in Vic. Property & Titles Vic do (old Valuer General and Land Titles office. Councils also use that value or modify it.

The difference are explained here. Some older vals did come from council but that is being phased out and further complicates objections as explained in the link.

Land valuations | State Revenue Office

If you follow the process under both note that under both path they dont have to do anything and then you must object or appeal so it becomes a supreme court matter.
carefully note that if a council valuation is used by OSR the process requires them to raise it with council. The council pathway is for rate notices only.

Any objection to a value at a specified date needs to be valid. This may require professional guidance

 

The issue is the land tax formula.
Is it a time to cry loud to have decision makers attention. The formula for the land tax calculation wasn’t changed for a decade. It doesn’t reflect inflation and the property growth for the last 10 years. I and my husband working hard and accumulated a number of properties for the last 20 years hoping to fund our retirement. Happy to pay the fair tax on the land, but with recent evaluations and old formula that taxing 2.25% of everything that more than 3 million, it become impossible to hold properties.
Our state governments have a gold mind of land tax collection, so not in the interest to change it. Should we create a noise in social media and TV to lobby changes? I have wrote to Michael Yardney to start a campaign and to Current Affairs. If everyone of us will complain and create a noise we have a chance to change something.