So you are now a property owner, congratulations!
But when the new financial year rolls around, and you start to receive your rates and tax notices from various Government departments, you may wonder how they arrive at the site and capital values used to calculate charges. What if you don’t agree with the value? What can you do about it?
Interesting questions that I’m sure you are not alone in asking – especially where values have changed dramatically from one financial year to the next.
One of the first steps to understanding this is to clarify the difference between Site Value and Capital Value, as different rating authorities may use one or the other. Site value is the unimproved value (basically the land value without improvements); and Capital Value is the improved value (land plus improvements e.g. buildings).
The State Valuation Office, under direction of the Valuer General, is the Government Department which annually re-values all properties within the State and determines both the site and capital values. These new values reflect the level of the market as at 1 January each year and take effect from 1 July each year. They are then adopted a short time thereafter by rating and taxing authorities.
Determining these new values each year, involves the State Valuation Office reviewing a number of different stages through the annual re-valuation cycle.
One of these involves analysing ALL property sales throughout the year which enables them to determine the market movements – which can vary depending on location and property type.
The data collected by the State Valuation Office is recorded on their property database. Each and every property in the State is captured under the database. The database contains information such as land use, the physical details of the land and details of all improvements such as building size, construction and condition. The information shown on this database is then available for purchase to the public via the SAILIS website, a database frequently used by those in the property industry.
This database is continually updated with changes to each property. These changes are identified from a range of difference sources such as development approval, information from councils and manual inspection programs by valuation field staff.
The property value is calculated by comparing the property data for your property to that of other similar properties that have sold, with adjustments being made for any differences that may apply. Valuers consider physical attributes such as:
So, getting on to the second part of the equation…. What if you don’t agree with these values?
Within the State Valuation Office there is a team that deal solely with objections. If you do not agree and believe the value of your property is incorrect, you can (within 60 days of the receipt of the fist rates notice from either the Council, SA Water or Revenue SA) send an objection in writing to the State Valuation Office. You must clearly state why you believe the value is incorrect and provide any recent evidence to support this.
You may not always agree with the value of your property but an objection should only be lodged after you have gathered the necessary evidence to support your objection. And be warned: the value of your property could also be increased if, during the objection process, if the State Valuation Office find that the value of your property is in fact too low!
So first make sure you understand how the valuation of your property was reached before going down this road.
Written by – Fiona Woolfitt