The Land Valuation Act 2010 (the Act) took effect from 20 September 2010. It has radically altered how non-rural land in Queensland is to be valued for land tax and rating purposes.
Site value – are you ready?
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A new method of valuing non-rural land for land tax, rental and rating purposes will commence with the issue of statutory land valuation notices in March 2011 with an effective valuation date for rates and land tax purposes of 30 June 2011.
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For the first time in Queensland, valuations will be based on “site value” rather than “unimproved value” and will take into consideration site improvements such as filling, clearing, rehabilitating, retaining or preparing the land for development including underground drainage but exclude structural improvements on the land such as buildings.
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“Site improvements” might be regarded as improvements made to the land, where as “non-site improvements” are those made on the land.
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The contentious issue of “intangible elements” (such as leases and goodwill) will no longer be taken into account in determining site value.
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Valuations issued using the new methodology may result in an increase in land values as the value of the site improvements is included for the first time.
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Those who own property upon which there has been substantial site work such as a high proportion of filling or reclamation (for example, waterfront estates or some industrial estates) are likely to see an increase in their land’s value.
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The Act allows those affected by significant increases in land value due to the inclusion of site improvements to lessen the impact of the new site value methodology by either claiming “site improvement deductions” or taking advantage of “offset allowances” in certain circumstances.
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It will be important to make a considered election as to the transitional arrangement of most benefit to you and your circumstances.
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If affected, you will only be able to take full advantage of the transitional arrangements by lodging a properly made objection within 60 days after the valuation notice issues.
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A properly made objection will require significant supporting material to be sourced and collated to support your claim for site improvement deductions.
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You should be preparing now for the issue of the valuations in March 2011 – it may be too late to secure the advantages of the transitional arrangements if you leave your preparation to the last minute.
What DibbsBarker can do to help you?
The foregoing does not constitute legal advice or a complete statement of the new law relating to the valuation of land in Queensland. How the Act will actually apply to you will depend upon the particular facts and circumstances pertaining to the land assets under your control. To better understand the Act as it applies to you and your circumstances, we recommend that you seek specialist valuation and legal advice.
Linda Morris of our Property and Projects group, heads a team of specialist lawyers including Danyelle Kelson and Vanessa Thompson who are available to assist you with any aspect of the Act including advising on how it may impact on your valuation, preparing for and exercising the transitional options available to you and objecting to valuation notices.
Our team has many years experience in the field of valuation objections under the Valuation of Land Act 1944, including involvement in some of the major cases in recent years against the inclusion of “intangible elements” in the valuation process. They have maintained an interest in the development of the law in this area and are keen to assist you to meet the challenges and reap the benefits of the new Act.
Please do not hesitate to contact us if you wish to discuss the matters raised in this publication in more detail or if you believe that we can be of assistance to you in preparing for the introduction of site values.
Linda Morris | Partner
T 617 3100 5014
Keith Carl | Partner
T 617 3100 5045
Matthew Rollason | Partner
T 617 3100 5041
