Valuation of Land (Separate Valuations) Amendment Bill
On the 17th of October, John introduced the Valuation of Land (Separate Valuations) Amendment Bill.
Please see his second reading speech below.
The Hon. J.A. DARLEY (17:31): I move: This bill is almost identical to a bill of the same name that I introduced last year to amend section 16 of the Valuation of Land Act.
The current section 16 of the Valuation of Land Act outlines that valuations may be separate or conjoint. It stipulates that the Valuer-General may, at their discretion, make a separate valuation of a portion of land or may value land jointly if it is required by law or if the land is under a separate physical occupation.
This provision was originally inserted in the act to account for situations where farmers leased part of their land to others on leases ranging from 40 to 1,000 years to establish shack sites. This occurred particularly along the River Murray.
Without a separate valuation, the landowner continued to have to pay rates and land tax on portions of land which were under a lease agreement and separately occupied. By creating separate valuations, rating agencies, such as councils and RevenueSA, then had the information needed to produce separate rates notices for lessees. This was reinforced in 1976 following a judgement by His Honour Mr Justice Wells in Harry v Valuer-General. The judgment resulted in amendments to the act. The Hansard relating to the amendments read:
In the judgment His Honour placed a rather restrictive interpretation upon section 16 of the principal Act which empowers the Valuer-General, in his discretion, to make separate valuations of any portion of any land, or to value land conjointly with other land. It is necessary for the Valuer-General to exercise his power to make a separate valuation of portion of a larger holding (a) where the land is under separate occupation and (b) in cases, such as those arising in the South-Eastern Drainage Act, where the Valuer-General may have to make a valuation of a proportion of land notwithstanding that it does not form a separate holding.
However, the Valuer-General is now creating separate valuations in a number of other circumstances, which is beyond the original intention of the section.
My amendment seeks to clarify that separate assessments should only be made in circumstances where it is required by law or where a property has been separately occupied since 1967 or under a shack site lease and is situated on land where formal subdivision is prohibited. Whilst there is provision to allow separate valuations to be made, if it is required by law, it excludes the Valuer-General from making a separate valuation if the request is made under the Local Government Act. This is because there is an ability for local councils to request the Valuer-General to make a separate valuation if a property is under separate occupation so that a separate set of rates can be issued to the occupier.
However, this does not mean that council's revenue will be impacted. Local governments will still be able to issue rates under separate occupation by requesting the Valuer-General to assign a tenancy apportionment to the property. A tenancy apportionment means the Valuer-General can assign a value to a portion of a property, based on tenancy, without having to create separate assessments.
At this point I should explain that, where the Valuer-General makes a separate valuation, they create a new assessment. It is the assessments that are used by rating authorities, such as SA Water, council and RevenueSA, to issue accounts. A tenancy apportionment will not create a new assessment, it merely assigns values to parts of the assessment. It is also important to note that the Valuer-General currently provides a tenancy apportionment for properties which have several occupiers but are on one title. Shopping centres, commercial office blocks and blocks of flats are some examples of these. In each of these cases, the portion that is occupied, such as a single shop in a shopping centre, cannot be sold off separately.
For the Valuer-General to create a separate valuation and assessment for other similar properties where there are multiple occupations on one title is inconsistent. This is the case with retirement villages, which is the only type of property I can think of which has separate assessments for each living unit even though they are often on the one title. Whilst council revenue should not be affected by my bill, SA Water will be unable to charge a separate supply and sewerage charge to the occupant as SA Water issues accounts based on assessments.
SA Water's system does not have the ability to account for tenancy apportionments, and nor should it. For SA Water to charge a fee to supply separate tenancies is laughable as they are not supplying anything. SA Water supplies infrastructure from the mains up to the meter. Anything from the meter to separate tenancies is the responsibility of the owner. Only very large tenancies, such as a large group of units with over 15 units in the complex, would have more than one meter. In these circumstances, it may be warranted for SA Water to charge a supply charge per meter; however, that is not their current policy. It is their current policy to charge per assessment, which is often individual units, even though they do not supply anything to the units.
Last year, as shadow treasurer, the Hon. Rob Lucas indicated that he could not support the bill without knowing what the revenue impact would be or whether there are any unforeseen consequences to these amendments. As such, I flag that I will be leaving this on the Notice Paper until at least the end of the year to give Treasury the time to crunch the numbers and investigate further the impact of these amendments. I commend the bill to members.