Billions at stake as land valuation system comes under fire
Dramatic drop … private and commercial property values. Photo: Ben Rushton
WEALTHY landowners are having their private and commercial property values reduced by billions of dollars for land tax and rating purposes after challenging official decisions, prompting concerns from the NSW government about the state’s valuation system.
Figures compiled by the NSW Valuer General for the past decade show more than 170 cases where there was a variation of more than $5 million between the initial valuation and the valuation after landowners objected or took court action. The total difference between valuations for these cases is about $1.6 billion.
The properties range from land in two of Australia’s most expensive streets – Wunulla Road and Wolseley Road at Point Piper – to the privately owned Sydney Opera House Car Park.
Valuation of $68.5 million reduced to $6 million … the neglected Camden Valley Golf Resort. Photo: Wolter Peeters
In the case of 55 Wunulla Road, owned by Alan Rydge, the chairman of the hotels and cinema group Amalgamated Holdings Limited, an initial valuation of $17.2 million was knocked down to $9.5 million in 2010 after an appeal to the Land and Environment Court.
The official land valuation for an apartment block at 128 Wolseley Road came in at $11.7 million in 2009 but was reduced to $4.5 million after the owners lodged an objection.
The valuation of the Opera House Car Park has fluctuated wildly over a number of years. In 2004 a valuation of $20 million was reduced to $8.9 million on appeal to the court, whereas in 2007 a valuation of $24 million was reduced to $15.4 million.
In another case, the Camden Valley Golf Resort, some of whose directors are senior rugby league executives, managed to get an initial valuation of $68.5 million reduced to $6 million on appeal in 2004.
The figures, tabled during a hearing of the parliamentary committee overseeing the work of the office of the Valuer General, have prompted questions about why there is such a significant fluctuation in determinations of land value. The NSW government uses the valuations for the purposes of land tax and compulsory acquisition of land. Councils use them to determine rates.
Asked about the discrepancies during a hearing of the committee, the Valuer General, Philip Western, said sometimes new information came to light which altered the valuation and that it was not an exact science.
However, the committee chairman, the MP for Hornsby, Matt Kean, said there were ”serious questions” to be answered by Mr Western. ”We’re seeing examples of the system failing at the top end, which my fear is could be occurring right across the board,” he said.
The Treasurer, Mike Baird, also said he was concerned by the figures. Last week Mr Baird voiced his frustration about the process following a speech at the Sydney Institute. ”The valuation process [for land tax] drives me crazy,” he said. ”There’s no transparency. No consistency. We need to get much more certainty and transparency.”
Mr Rydge declined to comment.