Valuations and Rates

A re-valuation establishes the value of a property relative to all other properties, i.e. its market relativity - not just between residential properties but also between residential and commercial, commercial and industrial properties etc.

This relativity determines how the total rates cost is shared or divided up amongst all properties. For example properties with higher market value attract higher rates than properties of lesser value.

Valuation process
Value definitions                                                
Valuing a property
How do valuations affect rates?    
Objections
Supplementary valuations

Valuation Process

The provision of Municipal Property Valuations are governed by the Valuation of Land Act 1960. (The Act). The Act was amended in 1998 to introduce two yearly (biennial) valuations.

The RELEVANT DATE is the date that all property throughout Victoria must be valued. The relevant date for the 2008 Re-valuation is 1 January 2008.
The relevant date for the last re-valuation was 1 January 2006 therefore the valuations appearing on the 2009/2010 rate notice represent the change in value between January 2006 and January 2008.

A re-valuation establishes the value of a property relative to all other properties, i.e. its market relativity - not just between residential properties but also between residential and commercial, commercial and industrial properties etc.

This relativity determines how the total rates cost is shared - properties with higher market value attract higher rates than properties of lesser value. (This is an important fact to remember - relativity, not necessarily a change in property value, determines whether an individual property’s rates charges will change following a general valuation.)

Value definitions

Valuation of Land Act 1960

Council must return 3 Valuations for each property, they are;

Capital Improved Valued (C.I.V.)

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 realise 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;

Site Value (S.V.)

Of land, means the sum which the land, if it were held for an estate in fee simple unencumbered by any lease, mortgage or other charge, might in ordinary circumstances be expected to realise at the time of the valuation if offered for sale on such terms and conditions as a genuine seller might be expected to require, and assuming that the improvements (if any) had not been made:

Net Annual Value (N.A.V.)

Of any land, means-

The estimated annual value of the land; or five per centum of the capital improved value of the land - (whichever is the greater)
Estimated annual value of any land, 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.)
In the case of farm land, a house, flat or unit (other than an apartment house, lodging house, or boarding house) in the exclusive occupation of the owner or tenant and used for residential purposes-

Five per centum of the capital improved value of the land.

Valuing a property

Property Values are determined by analysis of property sales and rental evidence, which is then applied to the data on each property.

Information is compiled on each property over time, through inspection, building and planning permits and other public sources.

The Valuer builds a profile of value levels for each different area/property type by analysis of recent sales and leasings. This information is then applied to individual properties taking into account the different characteristics of each property.

Values are derived from sales information reported to Council (under property sales law, Councils must be notified of property sales.) Data on property rentals and expenses is obtained (on a confidential basis) from Owners and Tenants.

Valuers also have statutory powers to obtain property access and/or additional information. This generally is done through request but a Valuer can enter onto any property "at any reasonable time" and may request any information that will help make a true and correct valuation. Additional Information may be required, for example, after extensive internal renovations.

How do valuations affect rates?

Revaluation

Your property valuation was re-assessed as at 1 January 2008 as part of a regular Statewide revaluation.
Yarra Council is required by State Government to revalue all properties within the municipality. Revaluations are conducted every 2 years by each of Victoria’s 79 councils. Valuations are used to determine a property owners’ share of the total rate revenue collected.
This year your valuation will be the same as last year unless you have had a supplementary valuation.

How can I calculate my rates bill?

Your rates bill is calculated by multiplying your property’s Net Annual Value (NAV) by the rate in dollar (4.4480). For residential properties the NAV is 5% of the CIV (which is the Capital Improved Value or total market value of your house and land). The rate in the dollar is calculated by dividing the total valuations of all properties in Yarra into the $67.3 Million needed by Council to deliver its services.

The following example illustrates how a rate bill is calculated for a property in Yarra.

The Residential Value is $550,000
5% of $550,000 (CIV) = $27,500 (NAV)

$27,500 (NAV) x 4.4480 (rate in the dollar)
Rate bill = $1,223.20

Objections

An objection is a formal administrative process governed by law and recognised by the Courts. The requirements and obligations of all parties are detailed in the Valuation of Land Act (1960).

An occupier or person liable to pay rates aggrieved by an assessment of value of any land (property) can lodge an objection to that valuation.

Objections must be lodged on the prescribed form. Particulars of the objection must be provided. The grounds for the objection must be stated!

Objections MUST be lodged within two months of the ISSUE of the rate notice. Objections are only applicable to the year they are lodged.

The valuer will contact the objector to discuss the objection and arrange a suitable time to inspect the property. Further consideration will be given to relevant sales of surrounding properties, property data, property condition, etc.

The valuer will determine an outcome after this review. The result can alter the valuation up or down by any amount, or the Valuer can elect to leave the assessment at its original Level.

Supplementary Valuations

In certain circumstances, valuations must be performed between general valuations. These are known as supplementary valuations.
For example, they are required when properties are:

• Physically Changed - when buildings are altered, erected or demolished.
• Subdivided
• Consolidated
• Portions sold off
• Rezoned

Supplementary valuations bring the value of the affected property into line with the general valuation of other properties within the municipality. Values are assessed at the date of the general valuation currently in use.

Supplementary valuations are made when required, usually on a monthly basis.

 

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Further information

Valuations Branch
Telephone 9205 5025
Email info@yarracity.vic.gov.au

Links

Within this site
Yarra City Council

External sites (Yarra City Council accepts no responsibility for the information or opinions contained within external sites)
Victoria Online

Information supplied by: Electronic communications & design officer - 9205 5214

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