Land Tax Grab

Published: 16 March 2010.

Contributed by Gavin Barnes of Redchip Lawyers

Proposed changes to the Valuation of Land Act

The Queensland Government has delayed the implementation of amendments to the Valuation of Land Act 1944 (QLD) ("VOLA") as pressure from industry groups, including the Queensland Law Society, builds in relation to proposed changes to, among other things, the definition of "unimproved value" of land, which is the basis upon which land tax and rates are calculated.

The proposed changes to the law come in response to a Court of Appeal decision handed down in late 2009 regarding the value of the land upon which the Pacific Fair Shopping Centre is constructed. In what was regarded as a win for the property industry, the court held that the State was not entitled to take into account the value of certain improvements on the subject land in determining the "unimproved value" of that land for the purposes of the VOLA.

This decision meant that the unimproved value of the Pacific Fair site for the purposed of the VOLA was $47.5million not, as the State had originally assessed, $255 million.

Alarm bells must have been ringing loudly in the halls of parliament house because shortly after the decision was handed down, legislation was proposed that essentially reversed the effect the Court of Appeal's findings by changing the definition of unimproved value such that it now specifically includesthe value of leases, goodwill, profit and loss and infrastructure charges.

The proposed legislation even includes a clause to state that "unimproved value has been given a special meaning that must be applied whether or not that definition accords with the ordinary meaning of that term".

So "unimproved value" under the proposed legislation now actually means "improved value".

What the?

In addition to the above:

the proposed changes are set to have retrospective effect – back to 30 June 2002 – which would presumably have the effect of nullifying any existing appeal as the new valuation methodology would apply to all VOLA land valuations from that date; and

the changes propose more onerous requirements on landowners in relation to objecting to land valuations and curtails rights of appeal to the Land Court where objections are not properly made.
Wow. In what has been a pretty tough year for the property industry, it is no wonder that the peak bodies are up in arms.

We will keep you posted as this unfolds.

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