Valuation Information from the Valuer-General's Office
John Darley, MLC (5AA 9.10-9.21)
(Byner: The real estate industry is always excited that property values are up substantially, particularly those that work on percentage. But you do need to be mindful that every levy, every rate bill, your sewerage charges when your property value goes up increase commensurately. The Feudalistic principle that as your place of residence increases, so does your capacity to pay, same applies to businesses, it’s a completely nonsense of course that merely owning some real estate makes you a landed gentry. But it gets better. You have the legal right to ask the Valuer-General to re-assess your given value and you get 40 days to object and that’s when you can ask them and often people do … show me the data that you used to get to this value of my house or whatever. Well guess what? We got a tip the other day that they’re wanting you to wait up to 90 days to get that information. Let’s talk to Advance SA’s John Darley, John, I wouldn’t have thought that’s too kosher.) Good morning Leon, it certainly is not. And as you quite rightly say that accounts are going out at the moment for Council rates and SA Water rates and if you look at the back of the account, or partway through the account, it says the terms of valuations on which the … account is being based, you have 60 days from the date of issue of the notice to object. Now the problem is a lot of those accounts are being received 15 to 20 days after the date of issue of the account, which says that in effect you’ve only got 40 or 45 days in which to object. Now as you say, to make an objection you’ve got to have details of sales evidence and in the past the Valuer-General has provided that information on request. Now the situation is if you contact the valuation hotline you’re being told that if you want that information, it could take up to 12 weeks to get that information, which is 90 days, which means you’ve past the expiry date for the objection. The only way to get around that would be, and I would suggest most strongly to people to do this, when you receive your rate account, irrespective of what the value is, you should object and that protects your right to object to the valuation. Now it’s a pretty inefficient way of doing it because then if you ask for the sales information on which the valuation was determined and you get it 70 or 80 or 90 days later, at least you’ve preserved your right to object and that’s the situation. (Byner: Stay on the line …)
Rob Lucas, Treasurer (5AA 9.13-9.15)
(Byner: Rob Lucas, good morning, you’re the Treasurer. I wouldn’t have thought that’s too kosher, Rob.) Well look, obviously if those are the timelines then it would create problems for people who genuinely want to go about appealing their valuation so … I’ve had a quick discussion … with Minister Knoll who’s responsible for this particular area and I know he’s trying to get information in relation to this particular issue for you. I mean, clearly, from the Government’s viewpoint, if that’s the case there’s a problem that we’ve inherited, we’re going to have to try and set up about correcting … there shouldn’t be a set of circumstances where if you need information within which you need to make a sensible decision about appealing a valuation, you should be able to get that information within the timeframe that’s required. Now I’m not sure, as John’s indicated, why these bills are arriving 15 or 20 days after they’re actually being sent so I guess we’d need to check with Councils and Government Departments and agencies as to why that’s the case. Certainly my Local Council bill seemed to arrive pretty quickly after it’d been sent. So that’s the first issue that John’s raised and we’d need to check through that particular issue. But the second issue as to why it’s taking such a long to provide the information that’s necessary is something that we’ll need to pursue and have a look at and happy to do so. I guess the other point to make too is that John’s identified the fact that it would be an inefficient system if the default position … is that everyone just appeals the valuation even if they don’t really want to appeal the valuation, that is they’re just protecting a right to appeal and that’s obviously just going to create unnecessary for a whole range of people. So we understand the issue, Minister Knoll’s set about the task of trying to … provide some answers and I’m sure when he’s in a position to do so, he’ll be happy to have a chat to you and your listeners on the issue. (Byner: Rob Lucas, thank you …)
Back to John Darley
(Byner: These numbers are important, just explain why … John.) Well the numbers are important because … the sewerage rates and Council rates are based on the valuation. Now if the valuation is not correct, well then you need to have the ability to object and the only way you can object successfully is get the information from the Valuer-General as to the sales evidence that they used to make the valuation.
Darryl Gobbett, Chief Economist and Financial Adviser, Baillieu Holst (5AA 9.15-9.18)
(Byner: Darryl … your take on this?) It comes back as we discussed a couple of weeks ago, the Government’s got to be raising money in some way and it’s either going to be through … the major parts where the Government raises money in South Australia is payroll tax or its land tax … they probably account for 70, 80 per cent of the total tax that the Government raises … in South Australia and … the land tax rates thresholds … which are the ones we get an exemption for the family home that we’ve spoken about … the conveyance and stamp duties … on conveyances, that the … land values are sort of going up, they’re actually going up significantly faster than the CPI, which is probably more reflective of how people’s earnings are going up. There is indexation of the thresholds, which is good but again, like we talk about with bracket creep on personal income tax … if you’ve got into the range where the property’s worth … $985,000, you pay $2.4 per hundred dollars, the … marginal rate is about 2.4 per cent. Well, even if you’re not moving into another threshold, there’s going to be increasing proportion of your land tax is going to be assessed at 2.4 per cent rather than the 1.65 per cent … so you do have this bracket creep inside. But again … what’s the most efficient way for us to be collecting the …taxes which we need to pay for our public sector and what size of public sector do we need, and … now this story that we could be spending another $1.8b on a new Women’s and Children’s … you put that together with the new Royal Adelaide, we would’ve spent probably in the order of $4.5b on building new hospitals … you work that out, that’s around about … $2500 to $3000 per man, woman and child just in the capital value of doing it, it’s getting to be a significant amount of money. So … it really comes down to what are the Government’s priorities because that’s really the only way we’re going to be looking at getting any significant tax relief … if Government spending comes down.
Back to John Darley
(Byner: John Darley, the deal is this: We have a situation where we want to make sure that if people get the value they don’t agree with, they have an opportunity to object and they’re not befuddled by delays in bureaucracy and nonsense. So … do you really think people should ring and object now? Seriously.) Oh absolutely and … Darryl mentioned land tax, well land tax accounts probably … start to go out October, November. Now we are aware of the fact there’s going to be substantial increases in valuations particularly in the City of Adelaide for commercial properties and I think the Property Council was advised by the Valuer-General some valuations could increase 100 per cent. (Byner: People aren’t going to be able to afford that.) Well that could bankrupt Rundle Mall if it comes to that point. Now it is critical that those owners, when they receive their accounts, they’ve only got 60 days to object and if that’s diluted by the fact that they won’t receive their accounts immediately and so it’s reduced, and then if they have to wait another 90 days, they then are ruled out from objection unless the Valuer-General says “look, I’ll waive the 60 days”. (Byner: Well what’s going to happen from here, John? Because this is not right.) Well I’m suggesting that anyone who receives an account and is concerned about the valuation of their property, they should immediately object. Now that is an inefficient way of doing things as Rob Lucas agreed, it’s not the best way to do it but I’m afraid if we can’t speed up the timeline in which people are provided with the sales evidence on which the valuation has been made, well that’s it. Now the problem there is that valuation services have been outsourced to Land Services SA, a private sector consortium, and that is where the delay is. (Byner: So this what … happened when we …) Sold the LTO. (Byner: Correct. And so really … you’re telling us this is a product of the sale of the Lands Titles’ Office that was used to bolster the budget.) There is no question about that. (Byner: Well, can we fix it?) Well, we’re trying to do what we can. I’m trying to get hold of the … policy issues that have been provided by the Valuer-General to the consortium who now make the valuations and also the key performance indicators under which they have to perform. I put in an FOI on that and that was denied. Yesterday at the Budget and Committee I asked the Deputy Valuer-General if she would provide copies of those policy directions and KPIs. She’s agreed to and I sit and wait and see what happens. (Byner: All right, thank you, John Darley.)