VICTORIAN PROPERTY TAXATION SYSTEM

VALUATION OF LAND ACT 1960

  1. DEFINITIONS
(1) In this Act unless inconsistent with the context or subject-matter—
"area" means the territory within which a rating authority levies rates or taxes;
"capital improved value" means the sum which land, if it were held for an estate in fee simple unencumbered by any lease, mortgage or other charge, might be expected to realize at the time of valuation if offered for sale on any reasonable terms and conditions which a genuine seller might in ordinary circumstances be expected to require;
"council" has the same meaning as in the Local Government Act 1989;
"estimated annual value" of any land, means the rent at which the land might reasonably be expected to be let from year to year (free of all usual tenants' rates and taxes) less--
(a) the probable annual average cost of insurance and other expenses (if any) necessary to maintain the land in a state to command that rent (but not including the cost of rates and charges under the Local Government Act 1989); and
(b) the land tax that would be payable if that land was the only land its owner owned;
"farm land" means any rateable land--
(a) that is not less than 2 hectares in area; and
(b) that is used primarily for grazing (including agistment), dairying, pig-farming, poultry-farming, fish-farming, tree-farming, bee-keeping, viticulture, horticulture, fruitgrowing or the growing of crops of any kind or for any combination of those activities;
and
(c) that is used by a business--
(i) that has a significant and substantial commercial purpose or character; and
(ii) that seeks to make a profit on a continuous or repetitive basis from its activities on the land; and
(iii) that is making a profit from its activities on the land, or that has a reasonable prospect of making a profit from its activities on the land if it continues to operate in the way that it is operating;
"general valuation" means a valuation of all the rateable land in the area of a rating authority or in any one or more subdivisions of such an area and includes any valuation made pursuant to sub-section (2) of section eight of this Act;
"improvements", for the purpose of ascertaining the site value of land, means all work actually done or material used on and for the benefit of the land, but in so far only as the effect of the work done or material used increases the value of the land and the benefit is unexhausted at the time of the valuation, but, except as provided in sub-section (2AA), does
not include--
(a) work done or material used for the benefit of the land by the Crown or by any statutory public body; or
(b) improvements comprising--
(i) the removal or destruction of vegetation or the removal of timber,
rocks, stone or earth; or
(ii) the draining or filling of the land or any retaining walls or other works appurtenant to the draining or filling; or (iii) the arresting or elimination of erosion or the changing or improving of any waterway on or through the land-

unless those improvements can be shown by the owner or occupier of the
land to have been made by that person or at that person's expense within the fifteen years before the valuation;
"mortgage" includes every charge upon land which is registered under any Act relating to the registration of deeds or instruments affecting title to land, and includes a transfer or conveyance to a registered building society, subject to a deed of defeasance in favour of a borrower;
"net annual value" of any land, means--
(a) except in the case of the lands described in paragraphs (b) and (c)--
(i) the estimated annual value of the land; or
(ii) five per centum of the capital improved value of the land--
(whichever is the greater); or
(b) in the case of any rateable land which is--
(i) farm land; or
(ii) a house, flat or unit (other than an apartment house, lodging house or boarding house) in the exclusive occupation of the owner and used for residential purposes; or
(iii) a house or unit (other than an apartment house, lodging house or boarding house) in the exclusive occupation of a tenant and used for residential purposes; or
(iv) a residential unit in respect of which a residence right in a retirement village (as defined in the Retirement Villages Act 1986) exists--
five per centum of the capital improved value of the land; or
(c) in the case of parklands, reserves or other lands owned by the Crown or any statutory authority, occupied (other than under any lease) for pastoral purposes only--the estimated annual value of it;
"owner" in relation to any land, means the person who is entitled to receive the rack-rent for the land or who, if the land were let at a rack-rent, would be entitled to receive the rent;
"Part" means Part of this Act;
"prescribed" means prescribed by this Act or by regulations under this Act;
"rating authority" means--
(a) any council in respect of its powers under any Act;
(b) any Authority under the Water Act 1989;
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(d) Melbourne Water Corporation;
(e) the Minister responsible for administering section 139 of the Water Industry Act 1994, when exercising the power to levy rates under that section;
(f) the Commissioner of State Revenue;
(g) any other authority which levies rates or taxes and is prescribed for the purpose by proclamation of the Governor in Council published in the Government Gazette;
"residential use land" means any rateable land--
(a) which is a unit or self-contained dwelling-house used solely for residential purposes; and
(b) which is situated in the municipal district of a council in which rates are levied in whole or in part on the site value of rateable land; and
(c) the site value of which, or in the case of a unit, the site value of the larger property of which the unit forms a part, has been declared by a valuer responsible for making valuations within the municipal district concerned to have been materially increased by reason that it is suitable for development or further development which is allowed by or pursuant to any relevant planning scheme;
"site value" of land, means the sum which the land, if it were held for an estate in fee simple unencumbered by any lease, mortgage or other charge, might in ordinary circumstances be expected to realise at the time of the valuation if offered for sale on such reasonable terms and conditions as a genuine seller might be expected to require, and assuming that the improvements (if any) had not been made;
"unit" means--
(a) a unit on a registered plan within the meaning of the Strata Titles Act 1967; and
(b) a stratum estate within the meaning of the Transfer of Land Act 1958; and
(c) a building or part of a building in the exclusive occupation of a person who is entitled to occupation by virtue of being a shareholder in a company which owns the building or a tenant of such a shareholder; and
(d) a residential unit in respect of which a residence right in a retirement village under the Retirement Villages Act 1986 is in force;
"urban farm land" means any farm land the site value or net annual value of which has been declared by the valuer appointed by the Council to make the general or supplementary valuation to have been materially increased--
(a) by reason of its proximity to land which has been or is being developed for residential, industrial, commercial or other urban purposes; or
(b) by reason of its proximity to land which has been or is being subdivided into allotments used or intended to be used predominantly for recreational or residential purposes--
and on which in the opinion of the valuer any farming operations would be ancillary to the predominant use of the land.
(2) In estimating the value of improvements on any land for the purpose of ascertaining the site value of the land, the value of the improvements is the sum by which the improvements upon the land are estimated to increase its value if offered for sale on such reasonable terms and conditions as a genuine seller might in ordinary circumstances be expected to require.
(2AA) Works relating to a port, being buildings, breakwaters, berths, wharfs, aprons, canals or associated works are improvements within the meaning of this Act.
(2A) In determining the estimated annual value of any land, the rent at which the land might reasonably be expected to be let from year to year is to be taken to be the annual rent at which the land might reasonably be let at the usually prevailing terms and conditions.
(3) If it is necessary to determine the capital improved value or site value of any rateable land in respect of which any person is liable to be rated, but which forms part of a larger property, the capital improved value and site value of each part are as nearly as practicable the sum which bears the same proportion to the capital improved value and site value of the whole property as the estimated annual value of the portion bears to the estimated annual value of the whole property.
(4) If it is necessary to determine the site value of a unit described in paragraph (a) or (b) of the definition of "unit" in sub-section (1), sub-section (3) applies, and a unit forms part of a larger property which is the land comprised in the strata subdivision.
(5) If it is necessary to determine the capital improved value or site value of a lot or lots on a subdivision under the Cluster Titles Act 1974, the rateable land includes any interest in common property and accessory lots, but does not form part of a larger property.
(6) Despite anything in this Act or the Local Government Act 1989, the capital improved value and the site value of any rateable land which is, or part of which is, land which is the subject of a covenant under sub-section (1) of section 3A of the Victorian Conservation Trust Act 1972 is calculated on the basis that the owner of the land isbound by that covenant as to the development or use of the land or part of the land.
(7) If any area of land which is not less than 4 hectares in size is planted after the commencement of the Forests Act 1907 with trees approved of by the Secretary within the meaning of the Conservation, Forests and Lands Act 1987 as being suitable for mining or commercial purposes, and those trees are planted not more than 3 metres apart from each other, in computing the net annual value or capital improved value of that area of land, the increase in the value of the area of land by reason of the trees
planted on it must not be taken into consideration.
(8) Despite anything in this Act or the Local Government Act 1989, the capital improved value, net annual value and site value of any rateable land which is a registered place within the meaning of the Heritage Act 1995 or on which there is situated a building which is included in the Heritage Register established under that Act must be calculated on the basis—
(a) as to the part actually occupied by the building included in the Heritage Register established under the Heritage Act 1995--
(i) that the land may be used only for the purpose for which it was used at the date of valuation; and
(ii) that all improvements on that land as at the date of valuation may be continued and maintained in order that the use of the land referred to in sub-paragraph (i) may be continued; and
(iii) that no improvements, other than those referred to in sub-paragraph (ii), may be made to or on that land; or
(b) as to any part (not actually occupied by the building which is included in the Heritage Register and which is not land that is included in the Heritage Register) that the building which is included in the Heritage Register cannot be removed or demolished and that any land referred to in paragraph (c) must not be subdivided or developed unless a permit to subdivide or develop the
land has been granted by the Heritage Council; or
(c) as to any land that is included in the Heritage Register established under the Heritage Act 1995 that the land cannot be subdivided or developed or if a permit to subdivide or develop the land has been granted by the Heritage Council, that it can be subdivided or developed only in accordance with that permit.
(9) If--
(a) a planning scheme under the Planning and Environment Act 1987 prohibits the pulling down or removal of a building; or
(b) a planning scheme under the Planning and Environment Act 1987 provides that a permit is required before a building may be pulled down or removed and--
(i) the responsible authority has refused to grant a permit; or
(ii) the Administrative Appeals Tribunal has directed that no permit issue--
then despite anything in the Local Government Act 1989 or this Act the capital improved value, net annual value and site value of any rateable land that includes the building must be calculated on the basis that the building cannot be pulled down or removed.

(10) Despite anything in this Act or the Local Government Act 1989--
(a) the capital improved value and site value of any parklands, reserves or other lands owned by the Crown or any statutory authority which are occupied (otherwise than under any lease) for pastoral purposes only are twenty times the net annual value; and
(b) the capital improved value and site value of unused roads and water frontages licensed under the Land Act 1958 or any corresponding previous enactment are twenty times the annual licence fee payable for them under that Act.

2A. DETERMINATION OF ESTIMATED ANNUAL VALUE

(1) Despite any law to the contrary, in determining the estimated annual value of any land for any valuation used by a rating authority for a rating period which commenced before, on or after 1 October 1995 no deduction is to be made for—
(a) any provision, allowance or notional contribution to a sinking fund for the renewal or replacement of any building, fitting, fixture or other improvement on that land; or
(b) any provision or allowance or setting aside of an amount for depreciation of any building, fitting, fixture or other improvement on that land.
(2) Nothing in sub-section (1) affects--
(a) the rights or obligations of the parties in the proceeding known as The Shell Co. of Australia Limited and Number 1 Spring Street Pty. Ltd. v City of Melbourne (Number 5994 of 1994) in the Supreme Court of Victoria;
(b) the determination of the estimated annual value of any land in any proceeding relating to an objection, or an objection requested to be treated as an appeal, to the valuation of that land for a rating period commencing before 1 October 1995 if--
(i) the objection or appeal has been lodged before 18 October 1995; and
(ii) the proceeding has not been finally determined before that time--
to the extent that the proceeding relates to the same rating period as the objection or appeal.
(3) Nothing in this section applies to the determination of the estimated annual value of any land in relation to any rating period which commenced--
(a) after the rating period which was the subject of the proceeding referred to in sub-section (2)(a); or
(b) after the rating period referred to in sub-section (2)(b) which was the subject of the proceeding--
but before 1 October 1995 with respect to the parties in those proceedings.

5A. DETERMINING VALUE OF LAND

(1) Unless otherwise expressly provided where pursuant to the provisions of any Act a court board tribunal valuer or other person is required to determine the value of any land, every matter or thing which such court board tribunal valuer or person considers relevant to such determination shall be taken into account.
(2) In considering the weight to be given to the evidence of sales of other lands when determining such value, regard shall be given to the time at which such sales took place, the terms of such sales, the degree of comparability of the lands in question and any other relevant circumstances.
(3) Without limiting the generality of the foregoing provisions of this section when determining such value there shall, where it is relevant, be taken into account--
(a) the use to which such land is being put at the relevant time, the highest and best use to which the land might reasonably be expected to be put at the relevant time and to any potential use;
(b) the effect of any Act, regulation, local law, planning scheme or other such instrument which affects or may affect the use or development of such land;
(c) the shape size topography soil quality situation and aspect of the land;
(d) the situation of the land in respect to natural resources and to transport and other facilities and amenities;
(e) the extent condition and suitability of any improvements on the land; and
(f) the actual and potential capacity of the land to yield a monetary return.

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