The new Land Valuation Act 2010 (LVA) became law on 20 September 2010. It replaced the Valuation of Land Act 1944 and introduced significant changes to land valuation practices in Queensland.
Importantly for landowners, the LVA changed the valuation method used by the Department of Environment and Resource Management (DERM) to value non-rural land for the purpose of calculating land tax and local authority rates.
Prior to the LVA, non-rural land was valued on its ‘unimproved value’. Now, under the LVA, land will be valued on its ‘site value’.
It is important for landowners to understand the difference between the unimproved value and the site value of their land.
The unimproved value of land is the expected realisation of a bona fide sale of that land without taking into account any improvements made on it. By contrast, the site value of land is the expected realisation of a bona fide sale of that land without taking into account the non-site improvements made on it.
That is, under the LVA, the valuation of non-rural land now takes into account any site improvements made to the land.
Site improvements are the ‘invisible’ improvements made to the land, including;
- clearing vegetation (pursuant to development approvals);
- picking up and removing stones;
- improving soil fertility or soil structure;
- if the land was contaminated then works to manage or remedy the contamination;
- restoring, rehabilitating or improving its surface by filling, grading or levelling;
- reclamation by draining or filling, including retaining walls and other works for the reclamation;
- underground drainage; and
- any other works done to the land necessary to improve or prepare it for development.
Understandably, these works are most common for commercial, industrial and waterfront properties. The same can be said for land which is being held and prepared for future developments, including residential developments. It should be noted that only "approved" improvements constitute site improvement.
Therefore, under the LVA, landowners of these lands are likely to face substantial increases in the valuation of their land. This will translate into increases in tax and rates that are calculated on those increased valuations.
Valuation of rural land will continue to be carried out on an ‘unimproved value’ basis. Therefore, landowners of rural land should not be affected by the above change in valuation method, though it is important to check this based on your previous valuation.
Landowners of non-rural land though, should consider objecting to increased valuations. They should not delay this step, as strict time limits apply to the objection and appeal process. A failure to lodge objections in a ‘properly made’ form within 60 days of the date of the new site valuations may result in a loss of right to object.
A delay in instructing expert lawyers to object on your behalf may prejudice your right to lodge an objection.
Read further on land valuation topics:
The current land tax system
Implications on land tax and local authority rates
The objection and appeal process
The offset method example
Land valuation objection process
msl's land valuation service
msl's land valuation objection fees