Valuations undertaken by Land and Property Information on behalf of the Valuer General for rating and taxing purposes are made under the Valuation of Land Act 1916 see the NSW legislation site www.legislation.nsw.gov.au These values refer to the value of the land only, they do not include the value of your home or other improvements.
The land value does not generally reflect the full sale price that could be obtained for the property.
Property sales are the most important factor considered when determining land values.
Most land in New South Wales is valued using mass valuation, where properties are valued in groups called components. The properties in each component are similar or are expected to reflect changes in value in a similar way.
Representative properties in each component are individually valued as at 1 July each year to determine how much the land value has changed from the previous year. The change is then applied to all properties in the component to determine their new land values. Sample valuations are then checked to confirm the accuracy of the new values.
During the valuation process, valuers analyse sales of both vacant land and improved properties, making adjustments for the added value of improvements.
The value of improvements is their worth as reflected by the real estate market in an area. The value of improvements is generally not equal to their replacement or insurance value.
Where mass valuation is not appropriate, valuers will individually value the property.
Unsuitable sales, for example those between related parties, are not used to determine land values.
When comparing property sales to the land being valued, valuers consider factors such as:
- property market conditions as at 1 July in the year of valuation
- most valuable use of the land
- location of the land
- constraints on use such as zoning and heritage restrictions
- land size, shape and land features such as slope and soil type
- nearby development and infrastructure
Concessions and/or allowances applying to your land value under the Valuation of Land Act 1916 will be printed on your Notice of Valuation or land tax assessment.
Factors such as personal circumstances, council rates and land tax liability are not considered when determining and values.
Use of the land
When considering land values, the Valuation of Land Act 1916 requires the land to be valued in relation to its highest practical use.
The permitted use of the land must be taken into account in determining the highest practical use. Where development of the land exceeds current zoning and planning restrictions the higher existing use must be taken into consideration by valuers when determining land values.
An easement is an acquired legal right enjoyed by the owner of land over the land of another. Land valuations do not take easements into account, as the valuations are required to be made on the hypothetical basis that the land is free of impediments to title. However, the physical effects of an easement, for example transmission lines, access roads and pipes laid for drainage, will be reflected in the land value.
These are recognised under two different Acts for rating and taxing purposes.
Heritage Act 1977
Properties listed on the State Heritage Register are valued under the provisions of sections 124 and 125 of the Heritage Act 1977. The value is known as a heritage value and takes into consideration the impact of the heritage listing. The heritage value is used for rating and taxing purposes.
Division 6 of Part 6 of the Heritage Act 1977 deals with heritage valuations see the NSW legislation site www.legislation.nsw.gov.au
Valuation of Land Act 1916
The land value of properties that are heritage restricted by a planning instrument such as a local or regional environmental plan is determined in accordance with section 14G of the Valuation of Land Act 1916. The heritage restriction is considered when determining the land value used for rating and taxing purposes.
See Application for Determination 14G form (PDF 69KB) - Application for determination of the land value for heritage restricted land (Section 14G of the Valuation of Land Act 1916).
Statutory restrictions on the use of the land are taken into account when assessing the value of land. Some examples include:
- Planning schemes, for example heritage restrictions imposed by a local environmental plan or other planning policies;
- Crown lease restrictions; and
- Rent-controlled land pursuant to the Landlord and Tenant (Amendment) Act 1948 see the NSW legislation site www.legislation.nsw.gov.au
Concessions and allowances
Concessions and/or allowances may reduce the value on which you are liable to pay rates and taxes. If a concession or allowance applies to your land, it will be printed on your Notice of Valuation and may be taken into account in determining your rating or taxing liability.
Off site / onsite allowance: An allowance for the added value of works by the current owner which improve the land or enable its more beneficial use.
Subdivision allowance: An allowance provided to the subdivider of the land for the discount applied from the total land values of the lots in a deposited plan had they been sold to one person.
Mixed Development Apportionment Factor (MDAF): The percentage of the land value represented by the non-residential use of a building comprising a mixture of residential and non-residential uses. Rates and taxes may be apportioned based on this factor.
Mixed Use Apportionment Factor (MUAF): The percentage of the land value represented by the non-residential use of a property comprising a mixture of residential and non-residential uses. Rates and taxes may be apportioned based on this factor.