FROM OUR VALUATION TEAM
We are often asked by our clients about the scope for objecting to the valuations placed on their properties by the Valuer-General of South Australia.
McGees Property has a high success rate in assisting clients object to their valuation assessments.
Here are some of their frequently asked questions, and our advice.
- What is Site Value, Capital Value, and Annual Value?
- How are these values assessed?
- How do these values affect property owners?
- Is it worth objecting to valuation assessments?
- How to lodge an objection
- Why engage McGees Property to object on your behalf
What is Site Value, Capital Value, and Annual Value?
Site Value is the assessment of the land value of a property excluding any improvements constructed thereon.
Site Value assessments are released by the Valuer-General in July each year. Property owners find out their site values after receiving their Land Tax Assessment Notice from RevenueSA.
Capital Value is the assessment of the value of the property inclusive of land and improvements that can include buildings, structures, leases, agreements, licenses, approvals, and encumbrances.
Capital Value assessments are also released by the Valuer-General in July each year. Property owners can their capital value listed on their council rates, SA Water bill, and Emergency Services Levy bill.
Annual Value is the assessment utilised solely by the Adelaide City Council in lieu of a Capital Value for rating purposes.
Annual Value is based on three quarters of the gross annual rental a property is reasonably expected to realise assuming the landlord is responsible for rates and taxes.
All Statutory Assessments are made as at 1 January each year, and are applicable to the following financial year.
How are these values assessed?
The Office of the Valuer-General conducts a mass appraisal of properties in South Australia and analyses data from identified submarket groups to derive an index by which to determine Site Value and Capital Value. The City of Port Adelaide Enfield undertakes separate assessments for non-residential properties.
The City of Adelaide undertakes assessment of Annual Value each year.
How do these values affect property owners?
Statutory authorities use these values to establish rating and taxing levies, including State Land Tax, Council Rates, SA Water Rates, and Emergency Services Levy for the new financial year.
Any increase in these values will see a direct rise in the rates and taxes payable by South Australian property owners.
The Revaluation Initiative was recently completed by the Office of the Valuer-General. We have noted substantial increases across a number of property and asset classes. This is compounding the recent aggregation measures introduced.
Is it worth objecting to valuation assessments?
A reduction in the assessed Site Value, Capital Value or Annual Value of a property can result in a significant saving on rates and taxes for that financial year (and beyond). The following example illustrates potential savings on a hypothetical reduction involving Site Value assessments:
| Site Value Assessment | State Land Tax Liability (single holding basis, general rates) |
|---|---|
| $1,200,000 | $7,340 |
| $900,000 | $3,035 |
As the recovery of State Land Tax is prohibited under the Retail and Commercial Leases Act, any reductions are generally returned directly to the property owners.
How to lodge an objection
To object to a valuation assessment placed on your property, you must provide sufficient market evidence to support your claim that your valuation assessment is incorrect. You are required to lodge the objection within 60 days of receiving the first rates notice from any statutory authority (i.e. SA Water, Council, Emergency Services, Revenue SA).
To achieve an amendment to assessed values, you must provide evidence that the current statutory assessment is more than 10% in excess of the market.
Why engage McGees Property to object on your behalf?
Our highly skilled team of qualified valuation professionals are experienced in building a strong case for Site Value, Capital Value, and Annual Value objections.
The recent Revaluation Initiative, coupled with aggregation measures, have resulted in substantial increases to property owners costs. Without careful review of your portfolio and appropriate professional advice, you may have Statutory Assessments which are well beyond market, costing you and your tenants. Professional and qualified valuation advice in relation to your Statutory Assessments is more important now than ever.
With access to the latest market intelligence and sales/rental data, the team can clearly articulate with the Valuer-General the best case for a reduction in the assessed value(s) of a property, particularly with reference to the Valuation of Land Act 1971.
Our clients who are property owners tell us that land tax is their greatest concern. In FY 2021 we achieved an over 90% success rate in assisting with objections, saving our clients thousands of dollars.
To discuss objecting to the Site Value, Capital Value or Annual Value of your property, please contact Nathan Robins or Tom Rowe in our Valuations division:
McGees Property is South Australia’s largest privately-owned commercial real estate firm, dedicated to helping our clients achieve their property-related goals.
The information contained in this article is general in nature and must not be relied upon for your own circumstances. You should discuss this with your own legal and accounting advisors.