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1

what is a municipal revaluation

• Is a mass appraisal (valuation) of:

(1) All "rateable” properties as per the definition under section 154 of the local government act
(2) “Non rateable Priperties” that are subject to a levy introduced under the fire service property levy act (2012) and set out in section 9 of the act

• The properties to be assessed held within a councils property system and are normally designated an assessment number (AN)

2

what is a mass valuation *

• A mass valuation of properties is best defined as:
“A systematic valuation of groups of properties at a legislated level of value date (1 Jan of each year) with the help of standard procedures and statistical analysis”

3

why undertake mass valuation

• The need for “mass valuations” has evolved as a result of Governments applying property taxes and levies that require a large number of properties to be valued to the same date within a short time period while maintaining low valuation costs

Prior to 2000
• Metropolitan Councils were required to return a valuation every four years
• Rural Councils every 6 years.

From 2000 until 2018
• A valuation of all rateable properties in Victoria was undertaken biennially

From 2019
• Annually

4

who undertakes mass valuatations

Valuation Authority:
The valuer-general under section 9 of the VLA is the Valuation Authority i.e. charged with the responsibility of ensuring the completion the valuation as per the Valuation of Land Act

• However under Section 10 of the act, a Council may nominate to the valuer-general that it will remain the valuation authority for that particular year until 30 June 2022.
• 4 Councils have taken that option for the 2019 Revel.

Who Undertakes The Valuations:
A valuation authority may only appoint a person or persons who hold(s) specified qualifications and experience to make valuations in accordance with Section 13Da of the act.
Must be qualified as described in A and B.
Certified practicing valuer through API or royal institute of charted surveyors

berlin btichz

5

define sub market groups and provide exampes

A set of properties, grouped by land values and other market characteristics or attributes common to the group, such as land use geographical feature or building construction.

Some of the groupings use include:
• Zoning
• Land use
• Geographical features
• Property Type
• Low density residential
• Irrigated dairy farming
• Beach frontage/views
• Prestige residences

6

define a tracking graph

o Represents sales as a ratio of the sale price to a prior valuation.
o Sale Price/CIV
o (<1 under sale price >1 over sale price)

•The purpose of a tracking graph is to monitor value shift trends against the previous revaluation

7

purpose of tracking graphs

• The purpose of a tracking graph is to monitor value shift trends against the previous revaluation.

They
1) Indicate the degree of market movement within a sub-market group (SMG) or group of SMGs.
2) Illustrate the consistency of the previous valuation.
3) Illustrate the consistency/inconsistency with which the market characteristics of property types are changing.
• The tracking graph provides a visual example of the consistency of sales to valuations.

8

explain VBP – Stage 2 in relation to tracking graphs

Stage 2 is the data collection and analysis stage for all properties
It Comprises;
(1) Property inspections of sales
(2) Confirmation or collection of valuation data inputs and any remedying data gaps identified in stage 1

It concludes with agreement between VGV contract manager and contract valuer on market movements and levels of value based on the analysis.

VBP – Stage 2:
• Prepare sales database from council records and all other available sources
• Formally request property data under Section 3A of the Act to obtain where applicable:
o current lease and occupancy information
o building areas
o relevant property data on special use properties.
• Prepare rental database from surveys and tenancy/outgoings schedules and other sources.

Residential Properties:
• Conduct a sales analysis for each SMG or group of SMGs.
• Track sales since January of the previous year.
• Inspect sale properties and correct/collect property data where necessary.
• Check information on sale properties against existing valuation and its data and correct errors where necessary.
• Determine sales to be used in analysis.
• Analyse sales evidence on corrected data.

Rural Properties:
• Conduct a sales analysis for each SMG or group of SMGs.
• Track sales since January of the previous year.
• inspect sale properties and correct/collect property data where necessary.
• check information on sale properties against existing valuation and its data and correct errors where necessary
• determine sales to be used in analysis
• analyse sales evidence on corrected data

9

explain VBP – Stage 2 in relation to tracking graphs
what information will need to be obtained about office and industrial

The valuations of commercial and industrial properties includes the:
1. Collection and collation of all current lease and occupancy information.
2. The preparation of a comprehensive sales database.
3. Research of sales and lettings and of comparable properties for special use properties.
4. Prepare look-up tables and valuation matrices.
5. Completion of valuations

• The majority of the Valuations for Commercial and Industrial properties are undertaken by a capitalisation Approach
• i.e The capitalisation of a net rent by an analysed rate of return
• Therefore a thorough sales and rental analysis is crucial in establishing an appropriate capitalisation rate.

10

explain speacilist properties

• Specialist properties possess one or more of the following qualities:
- major revenue significance to council;
- unique property type; and
- rarely sold and/or leased.
• The contractor prepares valuations for all specialist properties using templates if applicable or a separate spreadsheet are used.
- They set out the detailed valuation methodology and calculations for each specialist property .

• The Valuation of these properties requires a significant investment of time and research
• Examples of these type of properties include
➢ Aluminium Refineries
➢ Gas Plants
➢ Food Production Plants
• The major difficulty in assessing this type of property is the lack of comparable sales information
• Principal methodology is “cost less depreciation”
• Have to adjudicate what is “fixed plant and equipment and what is a chattel
• This question is the subject of much litigation since early in taxing regimes

Specialist Properties:
To enable valuers to complete these valuations they require:

A comprehensive inspection of the asset

Formally request property data under section 3A of VLA to obtain where applicable:
➢ A current copy of the most recent financial fixed assets register and reconciling balance sheet.
➢ Details of capital expenditure since previous revaluation valuations completed for acquisition, financial reporting, stamp duty, acquisition or insurance purposes.
➢ Current lease and occupancy information (tenancy and outgoings schedules).
➢ Full sales history of subject property.
➢ Any other relevant information for the subject property (see guidelines papers where applicable).

11

Explain VBP stage 3 final valuations

Stage 3 Final valuations
This stage requires the undertaking of valuations for all properties using the nominated valuation software (VBPSG compliant valuation system)
or VGV nominated property templates.
If templates are unavailable, a separate spreadsheet setting out the detailed valuation methodology and calculations for each nominated property is required.

12

define prescribed date

Date prescribed in Section 11 of the Valuation of Land Act 1960 as at 1 January of every calendar year.

13

define value drivers

Data elements or other information components used to calculate a valuation (orientation etc. different to each sub market group)

14

define sales ratio and formula

• Sales ratios are a means of comparing valuations with sales.

• Various statistics based on sales ratios provide measures of valuation accuracy and consistency.
A sales ratio for a sale property is calculated by dividing the proposed Capital Improved Value (CIV) by the sale price.

Proposed CIV
Sale Price

15

explain the sales ratio tolerance

< 1 indicates a property is conservatively valued
> 1 indicates a proper is over valued

Median Sales Ratio (MSR)
• The median sales ratio (for a sub-market group) is the mid-point of the sales ratios when they are arranged from lowest to highest.
• The MSR has a tolerance of 0.90 to 1.0
• If the median falls outside this range, it indicates that the majority of sales are more than 10 per cent under or over-valued.

16

explain the 5 valuation data types

• Qualitative data, relates to land or building features based on predefined categories e.g exterior wall (brick veneer, weatherboard etc)
Roof material (concrete tile, terracotta tile, CGI)
• Quantitative data, based on measuring or counting e.g Dwelling floor area
Number of bedrooms

Objective data items for which a correct value can be verified by measurement or observation e.g. land area, pool yes/no

Subjective data = involves judgement, more difficult to verify, e.g. Interior condition, quality of views etc.

Objective data is preferred, although some essential data elements are subjective