Page 3051 - Week 08 - Thursday, 7 August 2008
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pleasing to note that the problems identified in the New South Wales land valuation system were not found by the committee to exist in the ACT.
The committee’s report made seven recommendations. Its recommendations were: that the ACT government ensure that any future contracts for determination of land values for rating and land tax purposes be given to a single organisation to ensure consistency of valuations; that the ACT government consider requiring the land valuers practising in the ACT belong to the relevant profession; that the ACT government consider the replacement upgrade of the current computer-assisted valuation system; that the ACT government ensure that relativities between individual blocks in an area are regularly reset by a program of regular manual revaluations of suburbs; that the ACT government reviews the information that it provides to property owners at the time of valuation and via the ACT Revenue Office website; that the ACT government require the Commissioner of Revenue to initiate a review of the valuations of comparable properties when objection uncovers a significant error of valuation; and that the ACT government investigate a range of ways of using land tax as a lever to increase the supply of affordable housing.
The government has disagreed with recommendation 2. It has considered requiring land valuers practising in the ACT to be members of a relevant professional body and concluded that there is no need for the registration of land valuers. It has reached this conclusion because of the stringent requirements of the Australian Property Institute and the absence of a corresponding public benefit from restricting to the market.
The government has noted recommendation 3 because the computer-aided valuation system is owned by the current contractor, the Australian Valuation Office, and, hence, is outside the responsibility of the ACT government. However, under the terms of the contract, the AVO must provide the valuation services in accordance with professional standards, be reasonably accurate and must be of a high standard.
The government has noted recommendation 6 because the government considers that, as the relative administrative provisions already provide the power to the Commissioner for Revenue to initiate a review of the valuations of comparable properties when an objection uncovers a significant error of valuation, no further action is necessary.
The government agreed in principle with recommendation 1 because, although a single service provider currently provides valuation services for the government for rating and taxation purposes, future valuation of contracts will be subject to government procurement processes.
The government has also agreed with recommendation 7. However, it notes that there is little evidence to suggest that land tax has inhibited investment in rental accommodation. Furthermore, Treasury analysis indicates that land tax is unlikely to be an effective tool for increasing the supply of low rent investment properties. The analysis also shows a strong positive correlation between land values and rents. The suggestion that basing land tax on rents would not have a significant impact on investment and low rent properties.
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