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VALUATION OF LAND AND OTHER LEGISLATION AMENDMENT ACT 2010 No. 7 - SECT 7 7 Amendment of s 5 (Meaning of value of improvements)

VALUATION OF LAND AND OTHER LEGISLATION AMENDMENT ACT 2010 No. 7 - SECT 7

7 Amendment of s 5 (Meaning of value of improvements)

(1) Section 5(1), after 'added value which the'--

insert--

'physical'.

(2) Section 5(2)--

omit, insert--

'(2) However, the value of improvements can not be more than the total of the following--

(a) the price payable for construction of the physical improvements reduced by a discount for their condition, age, physical and economic obsolescence or any other factor diminishing their value;
(b) an allowance for holding costs over the time it would take to have had constructed improvements of a nature and efficiency equivalent to the existing improvements.

'(3) In assessing the value of improvements the price payable for the construction of the physical improvements must be calculated based on the level of construction costs current on the date of valuation and no allowance can be made for any additional costs by way of escalation.

'(4) In this section--

holding costs means rates, land tax and the interest cost at the bond rate of applying funds for the construction of physical improvements and holding the land during the construction period for the improvements.'.