Last week, most Victoria ratepayers received their annual Council Rates Notice. For some, it may be a shock. Many Councils are also imposing, in addition to the general rate, a specific charge for waste services. Kellehers’ extensive experience with rates and valuations has brought us close to the case law in this field.
Rates are based on land valuation, with the Rates Notice showing three types of values – Capital Improved Value (CIV), Site Value (SV) and Net Annual Value (NAV). Ratepayers should pay careful attention to and check each of these valuations.
‘Capital Improved Value’ (CIV) is the total market value of the property including the land and all its improvements.
‘Site Value’ is the value of the land alone, assuming it is vacant with no buildings.
‘Net Annual Value’ is 5% of CIV for residential properties. For non-residential, it cannot be less than 5% of CIV, but can be more based on the annual market rental of the property, less all necessary expenses required to maintain it, except Council Rates.
Responsibility for valuations in Victoria is now centralized with the Valuer-General and valuations take place annually. The relevant valuation date is 1st January of each year.
The Valuer-General analyses property sales and rents, looking at the type of property and its specific features, building a profile of value levels for different locations and property types, guided by the market sales and rental evidence[1]. This information is then applied to individual properties, taking account of the different characteristics of each property.
If a ratepayer disagrees with any of the valuations, they may lodge an objection. A strict time limit applies – 2 months from the Date of Issue as shown on the Rates Notice. Those wishing to object this year should work to the 2nd week of September for lodging objection.
A valuation objection is lodged via the Valuer-General’s online portal[2]. Valuation objections may appear simple but can be more complex than anticipated[3]. It is possible that objection may result in an increased value.
Once lodged, the Valuer-General refers each objection to a valuer who reviews it in light of the objection and contacts the ratepayer to arrange a mutually convenient time to inspect the property. The valuer has 4 months to review the valuation – and then formally advises Council of the outcome.
Rates must still be paid by the due date(s). Any rate change follows the Valuer-General’s review.
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Rates Beyond the General Rate
Victorian Councils are now applying a separate waste service change. Frequently, it is additional to the general rate. The Victorian Supreme Court, in August 2021 , upheld such an approach[4]. KA conducted the ‘test’ case on the point. After this decision, KA correctly anticipated the wider use of the waste charge to circumvent the State Government rates cap[5]. It is also possible that Victorian ratepayers may see other separate charges levied in respect of other particular council services. Watch this space.
Please email Dr Kelleher if we can assist you in any rates or valuation matter.
Dr Leonie Kelleher OAM
22 August 2023
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This fact sheet is intended only to provide a summary and general overview on matters of interest. It does not constitute legal advice. You should always seek legal and other professional advice which takes account of your individual circumstances.
[1] VCAT upheld this approach in Boulter v Valuer-General (Land Valuation) [2002] VCAT 305, VCAT P353/2022.
[2] https://ratingvaluationobjections.vic.gov.au/ (accessed 21 August 2023).
[3] Some complexities were discussed in https://kellehers.com.au/latest-news/land-valuation/ commenting on Boulter v Valuer-General (Land Valuation) [2002] VCAT 305, VCAT P353/2022.
[4] Mornington Peninsula Beach Box Association Inc v Mornington Peninsula Shire Council [2021] VSC 455; 248 LGERA 142.
[5] https://kellehers.com.au/latest-news/victorias-rates-cap-effectively-gone/