• Andrews Government Changes to Land Valuations

    2017-11-14

    Andrews Government Changes to Land Valuations

    The Andrews Labor Government has announced changes to land valuations. Under legislation introduced into Victorian Parliament last week, valuations will be conducted annually by the Valuer-General instead of by local councils every second year as they are currently.

    The Government states that by undertaking annual valuations, land and property values will be more accurate and up-to-date, ensuring taxpayers’ land tax bills will more accurately reflect the value of their landholdings.

    A further intention is the Valuer-General is best placed to undertake annual land valuations as they are able to let out larger contracts for valuation services across municipal boundaries, and have the expertise to manage valuation standards.

    The changes follow extensive consultation with local councils and the MAV.

    Along with centralising the process, the Government will pay for the full costs of revaluations, with councils paying the full cost of the supplementary valuation component. It is estimated that councils will save $15 million every two years under the new arrangements.

    The changes will begin in 2019, but Councils will have the opportunity to opt-out of the centralisation arrangement until 30 June 2022 to assist in the transition to the new arrangements.

    For those councils that do not opt out of the centralisation, the Labor Government will provide funding to help with the transition, including administration, IT and other costs.

    UDIA position

    There is concern that the Bill introduces a financial incentive for the over-valuation of properties.   
    In the past, council valuations have been fair and reasonable, and so in most cases there has been no need for the development industry to object to valuations. It has been suggested that this may be because there is not an explicit incentive for councils to disproportionately raise the values. 

    Under the State Taxation Acts Further Amendment Bill, industry is concerned that there will be too much of an explicit financial incentive for government to over-value properties. This is because the valuation amount directly affects the amount of land tax collected. With land tax going to government, it is worth considering that this Bill could cause government to over-value properties because of the associated benefit of greater land tax.  

    With this issue in mind, UDIA Victoria opposes the State Taxation Acts Further Amendment Bill.

    To read the full government press release, please see here