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Guide to valuations
What is a valuation?
A valuation is an assessment of the market value of a property, at a specific date and in accordance with relevant legislation and legal precedent.
The valuation process
The requirements of municipal valuation are governed by law - the Valuation Of Land Act 1960. This was amended in 1998 to introduce two-yearly (Biennial) valuations. The Valuer General supervises all valuations throughout Victoria and confirms the suitability of these valuations to be used for statutory purposes.
The valuation date
All properties in your municipality (and across Victoria) now are valued at a common date. Your property has been valued through a General Valuation as at 1st January 2008.
Who does the valuation?
Only qualified valuers - professionals holding recognised tertiary qualifications and with the required practical experience can perform municipal valuations. Valuers may be employed as Council staff or on a contract basis. Valuers operate under the highest standards of professionalism and ethics by declaring impartiality before undertaking valuations. Each stage of the valuation process must be approved and certified by the Valuer - General. Port Phillip Council currently contracts all valuation services to independent qualified Valuers.
How are valuations calculated?
Three valuations are provided for each assessment within the City of Port Phillip;
- Site Value (SV) - the market value of the land only;
- Capital Improved Value (CIV) - the total market value of the land plus buildings and other improvements;
- Net Annual Value (NAV) - Commercial / Industrial properties: the current value of a property's net annual rent i.e. gross annual rental less all outgoings - such as Land Tax, building insurance and maintenance costs etc, (but excluding Council rates).
Residential Dwellings / Own Your Own Flats: by law, the NAV must be 5 per cent of the CIV.
Property values are determined by analysis of market sales and rental evidence, which is then applied to the data on each particular property. Data 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.
Sales information is available through the council (under property sale law, councils must be notified of property sales). Data on property rentals and expenses is obtained from owners and tenants.Valuers also have powers to obtain 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. This may be done, for example, where an internal property inspection is needed to provide sufficient information to ensure an accurate valuation. The inspection is arranged with the owner / occupier of the property.
Supplementary Valuations
In certain circumstances, valuations must be performed between general valuations. These are known as Supplementary Valuations and occur when there is a building or planning change to the property.
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 same date of the General Valuation currently in use.
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How do I query or formally object to a valuation?
Informal query
It is imperative to determine whether the query is relevant to “the amount of rates being paid” or whether the query or concern is with the actual “valuation applied to the property”. If a ratepayer believes that the property would NOT obtain the valuations prescribed to the property at the relevant date, then the valuation department should be contacted.
Before lodging a formal objection, the Council encourages ratepayers to discuss issues on an informal basis with the Valuers in an attempt to resolve concerns they may have before the formal objection process is implemented.
Formal objection
Ratepayers may formally object to a valuation. The objection can be made in relation to the value of a property or on other grounds specified in the Valuation of Land Act. A formal objection MUST be registered with the Council within TWO MONTHS of the date of the rate notice.
A formal objection should be in the prescribed form available from your local municipal office and should include reasons for the objection detailing sales or rental evidence at the relevant date of valuation. Upon a formal objection being received by the Council, a detailed re-assessment of the property will be undertaken involving an internal inspection of the property. The Valuer will provide the opportunity for the objector to discuss concerns with the valuation.
If not satisfied with the decision, the objector may appeal to the Victorian Civil and Administration Tribunal (V.C.A.T). or to the Supreme Court.
If I formally object do I have to still pay my rates?
Yes. If you object to a valuation you still must pay rates by the due date. Failure to pay rates by the required date generally results in interest being imposed. If, however, it is determined that your property should have been valued for a lesser amount, you will be reimbursed for the relevant amount.
Land tax
The State Revenue Office uses site values for the purpose of assessing land tax under the Land Tax Act 2005. The site value of land returned at the 2008 Council general valuation, will be used for land tax in 2009 and 2010. There is a right of objection or appeal to a Council valuation arising from its use for land tax through the State Revenue Office. Objections relating to land tax MUST be forwarded to the State Revenue Office within 2 months of the date of the Land Tax notice.
Further information on the use of valuations for land tax can be found on the State Revenue Office Website www.sro.vic.gov.au
Contact hours
There will be a valuer available to answer telephone enquires and deal with public enquiries during normal business hours of 9.00am - 5.00pm.
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Calculation of municipal rates
The City of Port Phillip applies a formula (excluding any additional charges or arrears) to determine general rates:
General rates = valuation X rate in the dollar for all assessments
Rate in the dollar - Determined by the council as part of the budget process for the forthcoming year.
Garbage charge - An additional charge applied to residential properties at which a 240 litre bin is retained. The charge will be shown on the annual rate notice should you choose to retain this sized bin.
Example 1 - residential rate calculation
Using the net annual value as the valuation base, the calculation for a residential property worth $200,000 would have a net annual value of $10,000 (5 per cent of the capital improved value (CIV) as per legislation):
Net annual value: $10,000
Rate in dollar: 0.036088
$10,000 x 0.036088 = $360.85 (total rates and charges when rounded down to nearest 5c)
Example 2 - commercial or industrial rate calculation
On a commercial or industrial property within Port Phillip valued at $200,000 with a net annual value of $16,000:
Net annual value: $16,000
Rate in dollar: 0.036088
$16,000 x 0.036088 = $577.40 (total rates and charges)
Information about how your rates are calculated is detailed on rate notices sent to all property owners in Port Phillip.
For more information, contact the Valuation Department via eServices or phone ASSIST on (03) 9209 6777 or TTy (03) 9209 6713.
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