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Valuation of Land Amendment Bill 2008
Valuation of Land Amendment Bill 2008
Explanatory Notes for Amendments to be
moved during consideration in detail by the
Honourable Craig Wallace MP
Title of the Bill
Valuation of Land Amendment Bill 2008.
Objectives of the Amendments
The objectives are as follows:
1 To clarify that invisible improvements related to the value of the
business that is conducted on the land are not to be included in
the unimproved value of land.
· The Property Council of Australia (PCA), Shopping Centre
Council of Australia (SCCA) and Australian Property
Institute (API) have raised concerns about the potential for
the proposed amendments effectively moving invisible
improvements related to the business conducted on the land,
from improvements, which are not included in the
unimproved value, to the unimproved value of the land. This
is not intended, but could possibly be interpreted as such
with the present wording of the amendment.
· However, any increase in value caused by a development
approval, other approval or authority or local planning
instrument will be included in the unimproved value. This
confirms the historical approach adopted by the department.
This is supported by the fact that, historically, the value
flowing from the realisation of the ripeness of the land for
development was included in the value of unimproved land.
The decision of the Land Appeal Court, AMP Society v
Chief Executive, Dept. of Lands [1994-1995] 15 QLCR 344
confirmed this approach.
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Valuation of Land Amendment Bill 2008
2 To moderate any effect on the calculation of the commercial land
index used in the formula based approach for valuing prescribed
shopping centres caused by increases in commercial land values
in Brisbane and localised fluctuations of commercial land values
in other local governments,.
· The PCA, SCCA and API are concerned that the proposed
methodology for the calculation of the commercial land
index would allow for too great an influence from localised
fluctuations in commercial values and large increases in
Brisbane commercial values.
3 Remove the amendment to section 3(4) that stated that there is no
risk in realising the use of the land or continuing the use of the
land for any purpose for which it is being used. This will
preserve the existing interpretation and application of section
3(4)
· The PCA, SCCA and API are concerned that with the
inclusion of the amendment to section 3(4), the department
could value land based on an existing use when there is
evidence that there is a risk associated with continuing this
use.
Achievement of the Objectives
The objectives will be achieved by the following:
Clarify that invisible improvements related to the value of the business
conducted on the land are not included in the unimproved value by
modifying clauses 5 and 7. This will remove the terminology which is
subject to different interpretations.
Change the methodology for the calculation of the commercial land index
used for the prescribed shopping centre land. The index for all prescribed
land will be based on a calculation of all commercial land in the local
governments (excluding Brisbane) in which the prescribed land is located.
This will require amendments to clauses 9 and 13.
Remove the clause that states that there is no risk in realising the use of the
land or continuing the use of the land for any purpose for which it is being
used. This will require an amendment to clause 5.
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Valuation of Land Amendment Bill 2008
Consultation
There has been consultation with the Property Council of Australia (PCA),
Shopping Centre Council of Australia (SCCA) and Australian Property
Institute (API) which has resulted in these amendments.
Notes on Provisions
1 Clause 5 (Amendment of s 3 (Meaning of unimproved
value))--
This clause amends clause 5 by removing terminology that could be
misinterpreted. The PCA, SCCA, and API have raised concerns about the
potential for the proposed amendments effectively moving invisible
improvements from improvements, which are not included in the unimproved
value, to the unimproved value of the land.
This amendment will clarify that invisible improvements related to the value
of the business conducted on the land are not included in the unimproved
value.
However, any increase in value caused by a development approval, other
approval or authority or local planning instrument will be included in the
unimproved value. This confirms the historical approach adopted by the
department.
2 Clause 5 (Amendment of s 3 (Meaning of unimproved
value))--
This clause will amend clause 5 to delete the amendment that states that
there is no risk in realising the use of the land, or continuing the use of the
land, for any purpose for which it is being used at the date to which the
valuation relates. The PCA, SCCA and API are concerned that the
department could value land based on an existing use when there is evidence
that there is a risk associated with continuing this use. The removal of this
amendment will preserve the existing interpretation and application of section
3(4).
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Valuation of Land Amendment Bill 2008
3 New clause 5A
This clause inserts a new clause 5A. Clause 13 of the Bill declares that the
Valuation of Land Amendment Act 2003 No. 35 is taken to have never
commenced. This has the unintended effect of removing the words
`including improvements' from section 4 of the Act. There is a need to
retain these words in the legislation to maintain the strengthened definition
of `improved value' introduced in 2003.
4 Clause 7 (Amendment of s 23 (Chief executive may value
stratum or volumetric lot))--
This clause amends clause 7 by removing terminology that could be
misinterpreted. The PCA, SCCA and API have raised concerns about the
potential for the proposed amendments effectively moving invisible
improvements from improvements, which are not included in the unimproved
value, to the unimproved value of the land.
This amendment will clarify that invisible improvements related to the value
of the business conducted on the land are not included in the unimproved
value.
However, any increase in value caused by a development approval, other
approval or authority or local planning instrument will be included in the
unimproved value. This confirms the historical approach adopted by the
department.
5 Clause 9 (Insertion of new s 27)--
This clause amends clause 9 to change the methodology for the calculation
of the commercial land index used for the prescribed shopping centre land.
The index for all prescribed land will be based on a calculation of all
commercial land in the local governments (excluding Brisbane) in which
the prescribed land is located.
This will rationalise any effect on the calculation of the commercial land
index that could be caused by localised fluctuations of commercial values
and large increases in commercial values in Brisbane.
The PCA, SCCA and API are concerned that the proposed methodology
for the calculation of the commercial land index would allow for too great
an influence from localised fluctuations in commercial values and large
increases in the values for commercial land in Brisbane.
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Valuation of Land Amendment Bill 2008
6 Clause 11 (Replacement of s 70 (Costs of appeal against
valuation))--
This clause amends clause 11 to correct a typographical error.
7 Clause 13 (Insertion of new pt 9, divs 2 and 2A)--
This clause amends clause 13 to change the methodology for the
calculation of the commercial land index used for the part 1 prescribed
shopping centre land. The index for all part 1 prescribed land will be based
on a calculation of all commercial land in all the local governments
(excluding Brisbane) in which any prescribed land is located.
This will rationalise any effect on the calculation of the commercial land
index that could be caused by localised fluctuations of commercial values
and large increases in the value for commercial land in Brisbane.
The PCA, SCCA and API are concerned that the proposed methodology
for the calculation of the commercial land index would allow for too great
an influence from localised fluctuations in commercial values and large
increases in the values for commercial land in Brisbane.
© State of Queensland 2008
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