“Land tax valuation rip-offs exposed”

Mark Scala, Daily Telegraph, 5 October 2005

MORE than a third of property sale valuations used to calculate land taxes are unacceptably inaccurate, a report has found.

In some cases valuers are relying on prices up to a year out of date, says the report by Ombudsman Bruce Barbour.

It found that about a quarter of calculations used data between six months and a year old.
Mr Barbour said that in 43 areas surveyed, 35 per cent of sales valuation figures were wrong by more than 15 per cent – the accepted error rate.

However, in a greater majority of cases this had led to an under-valuation, rather than an over-valuation. Under-valuation means lower rates and taxes for property owners.

Land values are used by councils to set rates and by the government to determine land tax for investors who own property other than their home.

"This means there is an unacceptable risk of error in a considerable number of valuations," Mr Barbour said.

The report found that 1712 home owners who contested land valuations – representing about a quarter of dissenters – had their objection upheld.

"This reflects poorly on the general standard of accuracy currently being achieved through the mass valuation process," Mr Barbour said.

Figures used to determine land tax rates are based on sales reported in the area.

Along with 38 other points, Mr Barbour recommended that the date at which valuations are set be brought forward by four months to March 1 to ensure greater accuracy.
Valuer-General Philip Western said, while concerns had been raised, overall the Ombudsman had found the system to be sound.

"Less than 1 per cent of ratepayers have a concern about valuation," he said.

"The system is not run down. He's said the system is sound, but needs changes to the evaluation process."

Mr Western said most of the recommendations had been implemented already, and there were plans to look at the call to change valuation dates.

Opposition Leader Peter Debnam said the system was ripping off property owners, with the high level of successful complaints indicating millions of dollars were being incorrectly claimed by the Government.

"This flawed system has seen mum and dad property owners pay more than their fair share in land tax and council rates," he said.

Lands Minister Tony Kelly said the Government would look at resources to ensure accurate land valuations.

Land tax lawyer David Singer, who helped launch the investigation, said the report found the valuation process was flawed.

He said the valuations had been used by the Government for unfair tax increases on property owners, also leading to an increase in rental fees.

Further Information

For further information contact:

• Simon Singer
• David Singer