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Bill 1996
Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.
(a)
to amend the Valuation of Land Act 1916 to allow the Valuer-General
to determine the value of separate parcels of land that comprise the site
of a building by valuing the parcels together (even if they are in
different ownership or are comprised in different strata plans) as if they
were a single parcel and then apportioning that value between the
separate parcels, and
(b) to amend the Land Tax Management Act 1956 to give similar powers
to the Chief Commissioner of Land Tax for land tax purposes, and
(c)
to amend the Strata Titles Act 1973 and the Strata Titles (Leasehold)
Act 1986 to make it clear that if the site of a building is subdivided by
means of more than one plan, the parcels that are created by that
subdivision are to be valued in accordance with the above principles,
and
(d)
to amend the Valuation of Land Act 1916 to make it clear that
excavation and other work done for the purpose of the erection of a
building are to be considered to be land improvements for valuation
purposes, and
(e)
to make minor amendments to the Valuation of Land Act 1916, for the
purpose of inserting appropriate cross-references to the relevant
valuation provisions contained in the Strata titles Act 1973, the Strata
Titles (Leasehold) Act 1986 and the Heritage Act 1977.
Clause 2 provides for the commencement of the proposed Act on a day or
days to be appointed by proclamation.
Clause 3 is a formal provision giving effect to the amendments to the
Valuation of Land Act 1916 set out in Schedule 1.
Clause 4 is a formal provision giving effect to the amendments to the Land
Tax Management Act 1956 set out in Schedule 2.
Clause 5 is a formal provision giving effect to the amendments to the Strata
Titles Act I973 set out in Schedule 3.
Clause 6 is a formal provision giving effect to the amendments to the Strata
Titles (Leasehold) Act 1986 set out in Schedule 4.
Schedule 1
Amendment of Valuation of Land Act 1916
Valuation of parcels of land that form the site of a building
Amendments to the Valuation of Land Act 1916 provide for the method of
valuing parcels of land where the site of a building is subdivided into
separate parcels of land. For instance, the new valuation method will apply
where a building is the subject of more than one strata plan, or one or more
strata plans and a deposited plan, with each plan relating to different parts of
the building.
The new provision allows the Valuer-General to value all of the parcels of
land that are created by the subdivision together as if they comprised a single
parcel. The value of each separate parcel is then to be obtained by
apportioning the total value between the parcels on the basis of their
respective rental values. (See Schedule 1 [5])
Explanatory note page 2
This method of valuation will apply only if at least 2 of the parcels created by
the subdivision are adjoined horizontally (one above the other).
The object of this amendment is to overcome one aspect of the decision of
the Land and Environment Court in Perpetual Trustee Co Ltd v
Valuer-General (1994) 83 LGERA 206. That case involved the valuation of a
parcel of land used as an underground car park. The rest of the building
(erected on top of the car park) was comprised in a separate parcel. The Court
noted that a parcel of land is to be valued under the Act by assuming it is in
its virgin condition but that the adjoining land and environs are in their
existing condition. Accordingly, the value of the land used as a car park had
to be obtained by determining the capital sum that the land might realise,
having regard to the need to build the car park after the building on top of the
parcel was erected.
That valuation method resulted in the total value of the land used as a car
park, together with the land used for the rest of the building, being less than it
would have been if the whole of the building (including the car park) had
been comprised in a single parcel of land.
Land improvements
The definition of land improvements is amended to make it clear that the
excavation, filling, grading or levelling of land for the purpose of the erection
of a building, work or structure (other than for the purpose of works of
irrigation or conservation) is a land improvement. (See Schedule 1 [l])
This amendment aims to overcome another aspect of the Land and
Environment Court decision in Perpetual Trustee Co Ltd v Valuer-General
(1 994) 83 LGERA 206. The Court said that the excavation for a building is
not necessarily a land improvement because it does not necessarily restore or
improve land surface.
The effect of the amendment is that the value of any excavation or similar
work done for the purpose of erecting a building will be included in the land
value of the land.
Minor changes
Notes are inserted in the Act to refer the reader to the valuation provisions
contained in the Strata Titles Act 1973, the Strata Titles (Leasehold) Act 1986
and the Heritage Act 1977. (See Schedule 1 [2], [3] and [4])
Explanatory note page 3
Schedule 2
Amendment of band Tax Management Act
1956
The Land Tax Management Act 1956 is amended similarly to the Valuation of
Land Act 1916 so that, if the site of a building is subdivided into separate
parcels of land, the Chief Commissioner of Land Tax is entitled to value the
parcels of land in the same way as the Valuer-General under the amendments
contained in Schedule 1 [5]. (See Schedule 2 [l] and [2])
Schedule 3
Amendment of Strata Titles Act 1993
Schedule 3 contains amendments to the Strata Titles Act 1973 that are
consequential to the amendment contained in Schedule 1 [5]. The
amendments make it clear that if the site of a building is subdivided into
separate parcels, and one of the parcels is a strata parcel, the strata parcel is to
be valued in accordance with the principles outlined above.
Schedule 4
Amendment of Strata Titles (Leasehold) Act
1986
Schedule 4 contains amendments to the Strata Titles (Leasehold) Act 1986
that are consequential to the amendment contained in Schedule 1 [5]. The
amendments make it clear that if the site of a building is subdivided into
separate parcels, and one of the parcels is a strata parcel, the strata parcel is to
be valued in accordance with the principles outlined above.
Explanatory note page 4