More than one million new annual land valuations have been
issued to landowners in Queensland which will be used to assess land tax, rates
and State land rental charges. For
owners, reducing the statutory valuation of land can significantly reduce their
taxes and rates whilst enhancing the commercial value of their property. However owners have a strictly limited time to
object to the new valuations.
Land valuations in Queensland
Annual land valuations in
Queensland are made by the Valuer-General (VG)
under the Land Valuation 2010 (LVA).
These statutory valuations are used as the basis for levying a range of
taxes and charges on landowners, including:
- State land tax; and
- Local government rates.
The LVA requires land to be
valued on the basis of its ‘site value’
for non-rural land and ‘unimproved value’
for rural land. While there are some
differences between the way in which site value and unimproved value are
calculated, both basically involve determining the value of land on the
assumption that it is undeveloped and that any buildings and a range of other
improvements to the land have not been made.
The Land Court has described the
valuation process under the LVA as an ‘artificial
exercise’ for rating and taxation purposes with land required to be valued
according to a series of legal concepts and assumptions. There is also a large body of case law that
has been developed by the Courts to support the statutory valuation of land, including
legal principles and rules concerning the valuation exercise.
Annual valuations under the LVA
are therefore determined by the application of legal rules and principles,
although valuation and other expert evidence are usually crucial to the determination
New annual valuations
This year more than one million
landowners in 28 of Queensland’s 62 rateable local government areas have been
issued new valuations. The local
government areas with new valuations include Brisbane, Gold Coast, Logan,
Ipswich, Moreton Bay, Bundaberg, Gladstone, Rockhampton and Townsville.
The VG must notify owners of the
new annual valuations and owners have the right to object against the new
valuations to the VG. Owners who lodge
an objection and are not satisfied with the decision of the VG have the right
to appeal the valuation to the Land Court.
Landowners have 60
days from the date of the new valuation to lodge an objection. There are only very limited grounds for a
landowner to make a late objection so it is critical for owners who wish to
object to the new valuations to ensure that their objections are lodged within
An objection must be ‘properly
made’ in order to be considered by the VG.
Any objection that is not properly made cannot be considered by the VG and
will not give rise to any appeal rights to the Land Court.
Landowners must therefore ensure that their objections
comply with the relevant requirements of the LVA in order to be properly made.
Grounds of objection
An objection must include a range of mandatory information,
including the grounds of objection. According
to the VG, an objection must be based on at least one of a number of relevant grounds,
- The new valuation is not supported by property
- The new valuation does not reflect the physical
characteristics of the land and/or constraints on the use of the land.
It has long been established that the best evidence of value
is to be found in sales of comparable properties, preferably unimproved, on the
open market around about the relevant valuation date. That said, it can often be difficult to
identify comparable sales. Disputes may also
arise as to the analysis of comparable sales evidence and its application to the
Valuation objections or appeals will normally need to be
supported by sales evidence to establish that the VG’s valuation is wrong and
to support the valuation contended by the landowner. Valuation evidence will usually be provided
by a professional valuer on behalf of the landowner. Case law shows that it is very difficult for
owners who do not engage a valuer to successfully appeal valuations in the Land
The identification and analysis of sales evidence is a core
responsibility of a valuer and an objector or appellant without a valuer is
typically at a great disadvantage to the VG. Also, because statutory valuations are an artificial exercise for rating
and taxation purposes, valuers themselves need to be fully aware of the
relevant legislative requirements to ensure that their assessments confirm to
the correct legal principles and tests.
Legal review and analysis is often critical and owners will
usually benefit from the combined input of experienced legal and valuation
advisers to properly identify and apply sales evidence to the subject land.
Site constraints are physical features or characteristics of
the land or market or legal constraints which affect its valuation. Site constraints may include physical features
which affect its use (such as flooding) or legal restrictions on the use of
land (eg. town planning controls or heritage listings). Environmental constraints such as vegetation
or ecological values are also a common example of site constraints. Legal restrictions, such as those imposed by
easements or covenants, can also affect the value of land under the LVA.
Landowners need to ensure that relevant site constraints
have been identified and taken into account in the assessment of the new annual
valuations. In particular, given the ‘mass appraisal’ system applied by the
Valuer-General, it is not uncommon for individual site constraints to be missed
or not fully taken into account by the VG.
Owners may also need to seek legal or other expert advice in relation to
site constraints, such as the impact of planning risk or the highest and best
use of land.
Each valuation of land needs to be determined having regard
to its own characteristics and the circumstances applying to the land and above
is only a brief overview of some of the relevant issues affecting the new
Given the central role of valuations under the LVA in the
assessment of land tax, rates and State land rental, landowners should
carefully review the new valuations and consider seeking professional advice to
identify whether there are valid grounds to object to the new valuations so
that owners can reduce their taxes, rates and charges and maximise the commercial
value of their property.