Flashcards in week 1+2 Seminar Q'a Deck (14)
What is stat val?
a statutory valuation is made under the provisions of enabling legislation and sets out requirements under which valuation is made and includes the purposes for which it may be used.
*specifies the provisions of the valuation of land for a specific purpose
Statutory valuations are used for revenue generation purposes by applicable authorities (e.g. local gov’t or the office of state revenue)
2. What is the governing legislation in Victoria for valuation for rating and taxing purposes?
valuation of land act 1960
3. Why tax property?
So governments can provide necessary community services.
Property doesn’t cease to exist, so it is a constant thing that can be levied.
in order to fund infrastructure + services
land is immoveable so easy to track and monitor those not paying tax
form of equity tax - higher value the higher the paybale tax
- tax and levy remains with the title of the property
4. Are the following taxes a Federal, State or Local Tax?
a. Capital Gains Tax
c. Land Tax
d. Stamp Duty
e. Fire Services Levy
a. Capital Gains Tax = federal
b. Rates = local
c. Land Tax = state
d. Stamp Duty = state e.g. first home buyers
e. Fire Services Levy = state
federal = income tax, gst, capital gains
5. Is land tax and stamp duty payable on your principle place of residence (PPR) in Victoria?
stamp duty paid on every transaction
however, land tax not payable on Principle place of residence
6. Is GST payable on the sale of:
a. An industrial warehouse?
b. Established residential dwelling?
c. New vacant block of land?
A) industrial - yes, unless sold as a "going concern" than GST will not be applicable
A going concern is a business that functions without the intention or threat of liquidation for the foreseeable future
A sale of a going concern is GST-free if, in general, all of the conditions are met.
B) Established residential dwelling =
o GST treatment depends on whether it is a new residential premises, existing residential premises or a mixed use premises.
o GST is applicable to the sale of new residential premises
o GST does NOT apply to sale of existing (established) residential premises
mix of commercial + residential may be required to pay
New vacant block of land (new title/lots)?
yes GST payable
What is SV?
Means the sum which the land, if it were held for an estate fee simple "unencumbered by any lease, mortgage or other charge", (ignore current lease of charges in place) might in "ordinary circumstance" be expected to realise at the time of the valuation (valuation date) if offered for sale on such reasonable terms and conditions as a genuine seller might be expected to require, and "assuming that the improvements (if any) had not been made"
Unless those improvements can be shown by the landlord or occupier of the land to have been made by that person or at the person’s expense within the 15 years before the valuation;
Site value assumes certain site works have merged with the land unless (b) applies
after 15 years improvements can be included within the value e.g leveling land
What is CAV
"capital improved value"
means the sum which land, if it were held for an estate in fee simple unencumbered by any lease, mortgage or other charge, might be expected to realize at the time of valuation if offered for sale on any reasonable terms and conditions which a genuine seller might in ordinary circumstances be expected to require;
(similar to market value and does include any improvements to the land)
What is EAV
Estimated annual value:
means the rent at which the land might reasonably be expected to be let from year to year
(free of all usual tenants' rates and taxes) less— (don’t take into account maintenance works, fixture and fittings etc)
11. The Valuer-General Victoria has various responsibilities under the Valuation of Land Act 1960. Discuss the role of the Valuer-General its responsibilities.
The functions of the valuer-general shall be—
(a) to carry out the duties and functions conferred by this or any other Act;
(ab) to cause general valuations and supplementary valuations to be made;
(ac) to establish and maintain the valuation record, and to make certain parts of the valuation record publicly available in accordance with section 7D;
(b) to collect and collate such evidence as he thinks necessary or desirable to assist valuers in the making of valuations;
(c) to make available to valuers any evidence that may be of assistance in the making of valuations;
(d) generally to investigate and report to the Minister on any matter he considers likely to improve the standard of valuing in Victoria.
12. What does section 5(A) of the VLA 1960 refer to?
Determining the value of land
(2) In considering the weight to be given to the evidence of sales of other lands when determining such value, regard shall be given to the
• Time at which such sales took place,
• The terms of such sales,
• The degree of comparability of the lands in question
• And any other relevant circumstances.
(3) Without limiting the generality of the foregoing provisions of this section when determining such value there shall, where it is relevant, be taken into account—
(a) the use to which such land is being put at the relevant time, the highest and best use to which the land might reasonably be expected to be put at the relevant time and to any potential use;
(b) the effect of any Act, regulation, local law, planning scheme or other such instrument which affects or may affect the use or development of such land;
(c) the shape size topography soil quality situation and aspect of the land;
(d) the situation of the land in respect to natural resources and to transport and other facilities and amenities;
(e) the extent condition and suitability of any improvements on the land; and
(f) the actual and potential capacity of the land to yield a monetary return
13. List three reasons for a supplementary valuation to be carried out.
• A supplementary valuation is an updated valuation of a property for rating purposes whose valuation was previously set at the relevant date
(a) if any land which should be included in the valuation then in force is not included;
(ab) if any land which should not have been included in the valuation then in force was included;
(b) if the value of the land is materially altered by the approval of a planning scheme under the Planning and Environment Act 1987 or an amendment to a planning scheme under that Act, or by the granting, refusal or cancellation of a permit under such a scheme; (e.g. changing zoning from farming to residential land)
(c) if by reason of the sale of lots, any land in respect of which two or more persons are liable to be rated has been valued together as rateable land;
(d) if by reason of the purchase of land or any other cause, any land in respect of which only one person is liable to be rated has been valued as if more than one person was liable to be rated;
e) if any land has become rateable since the return of the existing valuation;
g) if by reason of—
(i) any building on the land being included in the Heritage Register established under that Act; or
(ii) any building ceasing to be included in the Heritage Register established under that Act; or
(iii) the issue of a permit under the Heritage Act 2017 to remove, demolish or alter a building included in the Heritage Register established under that Act or to subdivide or develop any land—
the capital improved value, net annual value or site value of that land has been materially decreased or materially increased;
(h) if by reason of the destruction or removal of buildings or other improvements on land or by reason of any physical changes of a permanent nature to land or improvements or by the making of roads or any other work of man or by adverse natural causes, the capital improved value, net annual value or site value of that land has been materially decreased;
(i) if any land or part of any land is burdened by a covenant under section 3A(1) of the Victorian Conservation Trust Act 1972 or, if upon variation or release of such a covenant, the capital improved value, net annual value or site value of that land has been materially decreased or materially increased;
(j) if by reason of the erection or construction of buildings or other improvements on land or by reason of any physical changes of a permanent nature to land or improvements or by the making of roads or any other work of man or by favourable natural causes, the capital improved value, net annual value or site value of that land has been materially increased;
(k) if there has been a change in occupancy which affects the net annual value of the land;
(ka) if there has been a change in occupancy which affects the AVPCC allocation given to the land;
(l) if there has been an error made in the AVPCC allocation given to the land, discovery of which has given rise to a change in the land use classification of the land;
(la) if any rateable land that was not leviable land has become leviable land since the return of the existing valuation;
lb) if any rateable land that was leviable land has become land that is not leviable land since the return of the existing valuation;
(m) if by reason of the sale, transfer or conveyance of any land or the transfer, surrender or expiration of a lease of any land there are on the land any of the improvements described in paragraph (b) of the definition of improvements in section 2(1) which were not made by the person who is the owner or occupier of the land;
(n) if for any reason other than a reason referred to in any of paragraphs (a) to (m), the capital improved value, net annual value or site value—
(i) of any land specified by Order of the Governor in Council published in the Government Gazette; or
(ii) of the land in any area specified by Order of the Governor in Council published in the Government Gazette—
is or is likely to have been materially altered as a consequence of any Act, proclamation, Order in Council, regulation, by-law or local law;
(o) if any arithmetical error has been made in calculating any valuation upon which any rate is payable or if by reason of any error in describing the land or any matter relating to the land or any improvements to it, an incorrect valuation has resulted.
14. Upon receiving a rates notice in Victoria how long do you have to object?
2 months if directly receiving the notice,
4 months if indirectly receiving the notice (tenant or through agent)