Rating and Taxation Flashcards
What is not rateable land? (S.154 Local Government Act 1989)
Crown land
Land used for charitable purposes
Land used for religious purposes
Land used exclusively for mining purposes
Land used for RSL or Airforce
What is the site value?
Vacant market value of land unencumbered by any lease, mortgage or charge
What is the capital improved value?
Market value of the property unencumbered by any lease, mortgage or charge
What is the estimated annual value?
The gross rental which the land would be expected to be leased for from year to year, minus outgoings except council rates (net + council rates)
What is the net annual value?
Whichever is greater of 5% of CIV or the EAV
What is the date that the rating valuations are done?
They are as at 1st January each year
How are non-conforming uses asses when it comes to rating and taxation vals? Eg. industrial factory in residential zone
The site value will be assessed as residential land
What is a supplementary valuation?
It is an updated valuation of a property for rating purposes whos valuation was previously set at the relevant date.
What are the reasons for supplementary valuations
Whenever something is triggered, a supplementary valuation will take place (change in zonings, building permits):
- Land that should be included is not (subdivision, consolidation)
- Valuation is altered by the approval of a planning scheme
- Value altered through physical changes to improvements
What are the grounds for objection?
Value is too low or too high
Apportionment of interest or valuation is incorrect
Lands that should have been included together have been done seperate
Lands that should been seperate have been done together
Wrong person named on the notice
Area, dimensions, or description is incorrect
Objection process
Objector to lodge objection within 2 months
Authority valuer has 4 months to either agree or disagree and recommend to VG
The VG within 2 months shall serve notice as to whether they agree or disagree
If VG disagrees, objector has 1 month to say they want to take it to VCAT
What are the recent 4 legislative changes regarding tax?
Land Tax threshold lowered
Commercial stamp duty moving to a yearly tax
Windfall Gains Tax - Uplift from rezoning
Vacant Land Tax - has been around but now more widespread
Soon to come - tax on development sites unoccupied for a few years
What was the Ararat Windfarm Case?
Chattels vs Fixtures - court of appeals upheld decision that the wind turbines would not be included as fixtures to the land.
How would you determine the site value of a heritage property?
Look at HBU first - what are the restrictions
Where possible find comparable properties
Refer to cases
What is the GPO case ?
Determined that SV was $1 of a heritage property because the land could only be used for the heritage restriction, after deducting cost to construct from the CIV it was left with a $1 SV (or nominal amount)
Why is NAV different to real market rent?
NAV is higher of 5% of CIV or EAV - these are also based on 1st January as per usual. The EAV is also done on the gross rent minus allowable outgoings (council rates & sinking fund), or with net rent plus council rates. In the market council rates is often recoverable and therefore this represents a different amount
What is the tax amount for windfall gains?
62.5% for value uplift between $100k-$500k and over $500k is 50% of uplift.
You are approached by someone who wants to object to their land tax. What do you do, what do you tell them?
Firstly i would want to know why they want to object and see whether this is a ground for objection. Once we have established that i would want to perform a valuation to see whether this actually exists. (Land tax is done on the site value given from the ratings calculation but is given December 30). Then we would proceed to lodge an application for objection and it must be within 60 days of receiving the assessment.
How is the site value for a strata retail shop calculated?
We cant do a site value just by comparison, as a strata property forms a larger part of the whole parent development. Therefore, in ratings and taxation, we find out the eav of the strata property, and find out the eav of the whole development. This then gives us a percentage to use. Once we have this we adopt a site value for the entire development and use the percentage to calculate the site value of the strata premises.
Land tax thresholds?
Starts at $50,000 - $100,000 = $500
$100,000 - $300,000 = $975
$300,000 - $600,000 = $1350 + 0.3% over $300k
$600,000 - $1m = $2250 + 0.6% over $600k
$1m - $1.8m = $4650 + 0.9% over $1m
$1.8m - $3m = $11,850 + 1.65% over $1.8m
$3m+ = $31,650 + 2.65% over $3m
15 Year Rule for Site Value?
When an owner has improved the land at their own, for instance farmers adding in drainage and filling, this will not be counted in the site value for 15 years. Things such as drainage and filling, removal of trees or removal of sand, rock, stone etc. when done at owners cost.
What date is Land Tax Calculated at?
Its whoever legally owns the property on 31st december and its based on the site value of the prior year
What are the important parts of valuation of land act?
Section 5a - valuing a property
Supplementary valuations
Fire services levy
Windfall gains tax
Objections
Definitions
What can trigger a supplementary valuation?
Change of occupancy (commercial), subdivision of land, something being built. something being demolished
