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Land valuations system overhaul recommended for NSW

Landowners in NSW will be given more power to appeal against official valuations that determine how much they pay in land tax and council rates under an overhaul of the system recommended by a parliamentary inquiry.

 

The inquiry into the NSW land valuation system also recommends abolishing the office of the valuer-general and replacing it with a new valuation commission.

The change, designed to redress a perceived lack of independence, would see the NSW Valuer-General, Philip Western, asked to reapply for his job.

In addition, the report contains a call to rethink how council rates are determined, to remove discrepancies in the size of the bills received by owners of similar land.

"This is a system that has systemic issues, particularly regarding the fairness in the way landholders are treated and the transparency surrounding how land is valued," said the inquiry chair, Hornsby MP Matt Kean, in a report tabled in Parliament on Thursday afternoon.

The inquiry was established in response to concerns about the fairness of the NSW land valuation system, which the government uses to assess land tax and for the compulsory acquisition of land and councils use to determine rates.

Last year, Fairfax Media reported that wealthy landowners were having their private and commercial property values reduced by billions of dollars for land tax and rating purposes because they could afford challenges in the Land and Environment Court.

In Broken Hill, a mining company, Perilya, had its land valuation reduced from $21 million to $4.9 million after an appeal.

It also emerged that more than 40 per cent of the valuer-general's valuations in the state's midwest were wrong. A dispute over the compulsory acquisition of a quarry by Hornsby Council raised more concerns.

The inquiry engaged an accountancy firm, Crowe Horwath, to examine the 2.4 million official valuations carried out in NSW each year for the past decade.

It found that on average, between 2001-11, valuations by the NSW valuer-general have been in line with changes in market values, but individual property owners were at risk from significant annual fluctuations.

The Kean report finds a lack of transparency in the current valuation system because the guidelines used to value land are confusing and not readily available to the public.

It finds that the independence of the office of the valuer-general has been undermined by its relationship with the department of land and property information, whose officials are sometimes involved in land valuations.

The report, unanimously endorsed by members of the joint parliamentary committee, recommends the establishment of valuation commission headed by a chief valuation commissioner, who should issue clear public guidelines about how land is valued.

It says council rates should be calculated on the average of the last three years of valuations - as land tax is currently calculated - to "dampen" large fluctuations in land tax bills and rates notices.

As well, landholders should be entitled to request a valuation review within three months, and would be able to make a submission to the review. This would include the right to have a "conference" with the valuer to discuss their submission.

After three months, the landholder would be eligible to apply to the Administrative Decisions Tribunal or the Land and Environment Court.

Read the full article in the SMH here.