Rates, land taxes, and other taxes and levies charged on properties in the six states and two territories around Australia are, almost without exception, calculated in proportion to some version of the value placed on each property by the Valuer-General in the relevant jurisdiction.
Without exception, these values are assessed in accordance with a state or territory act empowering and requiring the Valuer-General to make the valuation assessments and the procedures to be followed during that process.
The taxes, rates, and levies calculated using the assessed valuations are significant and ongoing, often leading to difficulties retaining properties or compromising the profitability of property-dependent businesses.
Valuation Methods
Typically, these rates, land taxes, and levies payable are calculated by multiplying the unimproved value of a property – its market value if it were sold without buildings and most other improvements – by a factor determined by the relevant local authority or state revenue office. In some cases, including Victoria and Western Australia, municipal rates are calculated by applying a factor to the assessed full capital value of the property – including the value of buildings and other improvements.
Often the values placed on properties are based on mass valuation methods, which fail to take account of the characteristics of individual properties, which can result in significant errors in valuations.
Objection Process
All jurisdictions provide an avenue for objecting to an assessed valuation, but the time period for lodging an objection is limited – usually 60 days – and it is often strictly enforced. Objection time limits are listed for each jurisdiction below.
If the initial response to an objection is unsatisfactory, further appeals are always available, but only if a valid objection has first been lodged.
It is important to note that generally only certain grounds of objection, with supporting evidence, will be considered. If broad or incomplete grounds are used, the objection will be deemed as not being ‘properly made’ and a correction notice will be issued.
For example, the Queensland Valuer-General has indicated that acceptable grounds for objection may include:
- sales evidence supporting a different value;
- the physical characteristics or constraints on the use of the land supporting a;
- different value; or
- other issues that may affect the valuation.
Grounds that the Queensland Valuer-General has listed as likely to be deemed unacceptable include:
- statements that are unsubstantiated, broad or generalised;
- comparisons with the general market indicators; or
- comparisons to previous land values.
State and Territory Specific Guidelines
Queensland
In Queensland, objections must be lodged within 60 days of the date of issue of the valuation notice.
The 60-day objection period for the 2024 land valuations closed on Monday, 27 May 2024.
New South Wales
Land in New South Wales is valued for rating and tax purposes as at 1 July each year. You have 60 days following the issue of a new valuation to object.
After lodgement of the objection, the Valuer-General will review the case and provide a decision within 90 days.
If you are not satisfied with the outcome of your objection, you can appeal to the Land and Environment Court of New South Wales.
Victoria
Land in Victoria is valued for rating and tax purposes as at 1 January each year. The Valuer-General Victoria is the valuation authority for annual valuations of all land in Victoria for council rates, land tax and the fire services property levy.
Both an unimproved Site Valuation (SV), and a Capital Improved Valuation (CIV) (the value of the land plus the buildings on it and any other capital improvements) are assessed for each property. A notional annual income for each property, called a Net Annual Value (NAV), is also used.
Note that in Victoria, in addition to rates and land tax, land is potentially subject to a Windfall Gains Tax (calculated on any “instantaneous” increased Capital Improved Value on land re-zoning), a Vacant Residential Land Tax, and a Fire Services Property Levy. Whilst Land Tax in Victoria is levied on Unimproved Valuation as in New South Wales and Queensland, Municipal Rates, the Windfall Gains Tax, and the Vacant Residential Land Tax are calculated using the CIV.
While the Valuer General Victoria carries out all statutory valuation in the state, objections to a rates valuation must be lodged with the relevant local authority and objections to a land tax valuation must be lodged with the State Revenue Office.
Land Tax objections and (generally) rates valuation objections must be lodged within two calendar months of an assessment.
South Australia
South Australian land values are determined by the SA Valuer General as at 1 January each year. Both Site Value (essentially, unimproved land value) and Capital Value (Site Value plus value of improvements including buildings) are assessed.
Site Values are used to determine:
- some regional council rates; and
- Land Tax.
Capital Values are used to determine:
- most council rates;
- Emergency Services Levy; and
- Water and sewerage rates.
Objections to valuations must be lodged within 60 days of receiving the first rate notice from any rating authority for the financial year.
Western Australia
An objection must be lodged within 60 days of the date of issue stated on your local government rates, water rates, land tax or pastoral rent notice.
Your billing notice is required to be paid by the due date, irrespective of whether an objection will be or has been lodged. Once a decision has been made by the Valuer-General, Landgate will inform all relevant rating authorities of any revised gross rental value (GRV) or unimproved value (UV). These authorities will reference the new assessment, adjust your rates or land taxes where applicable, and provide either a refund (where GRV/UV has reduced) or an interim rate notice for additional payment (where GRV/UV has increased).
The GRV is the total annual rent a property might reasonably be expected to earn each year if it was rented out. This includes associated rates, taxes, charges, insurances, and other outgoings. For non-residential properties, GST is also included.
The GRV is determined by the Valuer-General for all rateable and leviable properties in Western Australia. Landgate provides these figures to rating authorities who use it to work out the rates, service charges, and levies that property owners must pay.
UV is the value of the land only. For land within the metropolitan area and regional townsites, the UV includes merged improvements such as drainage, levelling, and filling.
The UV is provided to:
- RevenueWA to determine land tax (for properties that are not the owner’s primary residence); and
- Local governments to determine rates on some properties of a rural or rural-residential nature.
Australian Capital Territory
There is a strict 60-day time limit for lodging objections to valuations. This period begins on the date you receive your valuation notice, except in relation to commercial land where additional information has been requested.
For valuations of commercial land and rural land, if you lodge a request for additional information within 28 days of receiving your valuation notice, the time limit to lodge an objection to the valuation is 60 days from when you receive the additional information.
Under the law, the Commissioner for ACT Revenue cannot accept objections after these time limits.
You must wait until you receive your next annual valuation notice for the opportunity to object.
Northern Territory
Every three years, property owners in the Northern Territory are issued a notice of valuation for their property from the Valuer-General. This notice specifies the unimproved capital value of the property as assessed by the Valuer-General. The valuations are dated 1 July of the year in which the valuation is performed.
Unusually, landowners in the Northern Territory have only 30 days from the date of issue (as opposed to receipt) of a valuation notice to object.
Tasmania
An owner of land can object to a statutory valuation. The objection must be made within 60 days from receiving a Notice of Valuation.
Stay Informed and Take Charge of Your Valuation Process
Understanding your property’s statutory valuation is essential for navigating the complexities of taxes, rates and levies.
Protect your financial stability by staying informed, and consider reviewing your valuation to ensure fairness and accuracy. If you believe your property has been overvalued, take advantage of the objection process within the specified timeframe. A proactive approach today can lead to significant savings and peace of mind in the future.
If you require guidance and support to navigate this complex system, reach out to Nick Knowlman.
