New legislation introduced under the Land Valuation Act 2010

The Queensland Government has introduced new legislation under the Land Valuation Act 2010, which came into effect on 20 September 2010. The Act introduces a site value definition and methodology which will apply to statutory land valuations for non-rural land issued from 2011.

A site value methodology is already used in other Australian jurisdictions. It is more aligned with market value, making the valuation simpler and easier to understand.

Until now, the State Valuation Service (SVS) within the Department of Environment and Resource Management (DERM) has prepared valuations for all properties in Queensland based on its unimproved land value. Unimproved value represents the market value of the land in its natural state, before any site works have been completed (e.g. filling or drainage).

Unimproved value has been in use in Queensland since 1944. However, as the state becomes increasingly more developed there is a declining knowledge of what land was like in its original state. This has made the task of determining unimproved value more difficult as time goes on, prompting a move to the new site value methodology.

This new valuation approach will not apply to rural land – it will continue to be valued using the unimproved value methodology from 2011.

What is site value?

Site value is the market value of the land in its present state. Site value reflects what the land would sell for in its current condition without deduction for invisible improvements such as filling, clearing and drainage

Site value does not include the value of structural improvements such as houses, sheds and buildings nor excavation necessary for specific structural improvements (e.g. for building footings, foundations or underground car park).

Will the introduction of site value lead to increases in statutory land valuations?

Most landowners will see very little difference in their statutory land valuation as a result of the introduction of the site value methodology.

The value of most residential land will not be significantly affected by the change in valuation method. For example, in the case of land that has simply been cleared and earthworks done to allow the construction of a residential building, there will be little, if any difference in value.

However, the valuation of some parcels of land will increase to reflect the difference in value between the land in its natural state (unimproved value) and its current state (site value). For example, industrial estates that have been heavily filled, retained or levelled to prepare the land for construction of structures on the land may see increases in value.

When will landowners next be informed of their land valuation?

Valuation notices will be issued to all landowners in March 2011.  The notice will advise landowners of the valuation method used (i.e. either site or unimproved value), the amount of their previous valuation and the amount of their new statutory land valuation.

For further information, go to Qld Government’s Department of Environment & Resource Management website:

http://www.derm.qld.gov.au/property/valuations/valuationact2010/site-value.html

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