“Value of properties to be checked”

NineMSN website, 5 October 2005

The value of 2.4 million NSW properties is to be checked after the ombudsman found there was an unacceptable risk of error in government valuations.

A report by Ombudsman Bruce Barbour has found one quarter of the approximately 8,000 objections to last year's state government property valuations were successful.

In 43 districts, more than 35 per cent of sales valuations used to support mass valuations demonstrated a margin of error greater than 15 per cent, Mr Barbour found.

The vast majority of these were under-valuations, meaning lower rates and taxes for property owners but the cash-strapped NSW government is losing revenue.

Land valuations conducted by the valuer-general determine the amount of land tax and council rates property owners pay.

Although the mass land valuation system was generally sound, Mr Barbour found there were serious weaknesses in its implementation and quality control systems.

"... the system is currently producing an uncertain number of values that have unacceptable margins of error," he said in his report.

"The dilemma for property owners is that it is impossible to know whether their particular valuation is sound or not."

Valuer-General Philip Western said he would implement all of the ombudsman's 38 recommendations for improving the valuing system and had already acted on most of them.

Under international best practice, a program of checking the value of all properties should be undertaken every six years, Mr Barbour said.

"We have now gone 16 years without any systematic review and correction of base line valuation data," he said in a statement.

"It's way overdue and a major cause of some of the problems."

The ombudsman's report said inadequate time and resources were put into checking the accuracy of valuations by contractors for the valuer-general.

Paying contractors as little as $1.77 per valuation was undermining the quality and accuracy of valuations, it said.

Opposition Leader Peter Debnam urged taxpayers to check their rates or land tax valuations to ensure the government was not ripping them off by overvaluing their property.

"I'd say to every taxpayer check that valuation and check if you think it's not correct," Mr Debnam told reporters.

Mr Western said Mr Barbour's report showed the valuing system was fundamentally sound.
"He's said, `look, there needs to be checks and balances in place,' and I'm implementing those at the moment," Mr Western said.

The report recommended changing the July 1 base line date for valuing properties to March 1.

It also said the government should consider basing land tax assessments on a rolling three or five-year land value average instead of annual assessments.

A spokesman for Premier and Treasurer Morris Iemma said it was not clear how much tax revenue the state government was losing because of inaccurate valuations of properties.
"The implication for revenue would have to be subject to treasury analysis," the spokesman said.

Further Information

For further information contact:

• Simon Singer
• David Singer