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Thursday, July 30, 2009
NSW Statutory Land Valuations - What if they are too high?
The Valuer General periodically values (at least once every 4 years) and issues a valuation list to rating authorities i.e Local Councils.
They must cause notice of each valuation in the list to be supplied to both the owner or rate paying Lessee of the property.
Additionally a Land Tax Assessment, land valuation, is also provided where there is a land tax liability, In case the valuation is provided annually, generally at the beginning of each year, in the Commissioner of Land Tax's assessment of land tax (land tax is paid on the average of the current and previous 2 years valuation assessments).
The Valuation of Land Act 1916 is the statutory basis for both such land valuations.
CAN YOU OBJECT TO THE LAND VALUES ? "YES!"
As a land owner rate paying lessee you have the right to object to the periodic valuation assessed and issued by the Valuer General, if you believe that the land value is incorrect.
There are a number of specific reasons set out by the Act, the most common ground being of course, that the Land Value is too high.
You have 60 days to decide whether to lodge an objection. The final date for objection is indicated on the issued Valuation Certificate.
The Land Tax annual assessment is a separate valuation. If you receive a Land Tax Assessment and believe the land value therein is incorrect you must separately object to that value. Again there is a 60 day time period which commences from the date of issue of the Land Tax Assessment Valuation (the right to object to the Land Tax Assessment is not so readily apparent; the right to object is shown on the assesment notice but on the reverse side).
It is important in the current troubled economic times that you do not overlook your rights of objection as generally land values have or are declining.
If you lodge an objection, the valuation is individually reviewed by an independent valuer.
Your objection however must be in the prescribed form with detailed supporting reasons for the objection. Importantly the frounds are quite specific in that an objection must be based on comparable sales and not comparison to statistical information or other valuations.
Inconclusion, we reiterate do not dismiss or put aside your Valuation Notice or Land Tax Assessment without giving consideration to the assessed values. You may be paying more rates and taxes than you should.
McGees can provide more detailed information as to your rights and advise as to whether you may or may not have a case to object and can assist in the objection lodgement process, having acted for many land owners over many years.
2009 - A MARKET FOR THE ASUTE INVESTORS
Interest rates are at an all time low with the current cash rate cut of 125 basis points effective on 3 April 2009 to 3.00% down from 4.25% in December last year. With the decrease in the cash rate we expect to see an increase in owner occupiers re-entering the Sydney Industrial Market as the cost of purchasing property falls. Rarely have we seen such a rapid turnaround in market drivers considering that in 2007 to 2008 the cash rate was between 6.00% to 7.25% and potential occupiers were forced into the leasing market.
As a result of the above we expect to see an increase in reported sales in 2009 and no doubt it will be investors and owner occupiers alike who will take advantage of the opportunities that this market will avail from those who are forced to sell.
Leasing activity has remained stagnant during the first half 2009 but due to strict lending criteria from banks, both private and institutions landlords have been unwilling to reduce rentals. Instead they have increased the level of incentives being offered to attract new tenants, in order to make relocation a more attractive proposition. There also has been an increase in the amount of sub letting space entering the market and this will also drive up the level of incentives, resulting in a competitive market. Despite the above, businesses acknowledge that there are tough times ahead and it will take some time to regain confidence and this obviously will have a detrimental effect on the market.
2009 is appearing to be another tough year for the industrial property market. However it is an interesting one. For the first time in many years property institutions and larger property funds are selling off portions of their property portfolio to reduce the level of debt and it is the wealthy private investors who are the driving force in the investment markets for industrial property.
Markets like the one we are experiencing at present, attract a great deal of negative attention. However the market collapse in the early 1990’s identified a number of very astute purchasers, both private and public, who enjoyed significant capital growth over the following decade. No doubt we will, in hind sight, be able to identify in a couple of years time the astute buyers in today’s markets.
(Cash rates sourced from RBA Statistics)