Understanding the Revaluation Initiative
This update is provided by the Valuer-General with the hope of improving clarity to our State’s property community regarding the Revaluation Initiative.
The Revaluation Initiative forms part of the annual General Valuation and does not equate to a blanket change in value for all properties.
Approximately 1,850,000 assessments are undertaken annually for the General Valuation. In 2015, it was identified that the data forming the basis of the annual General Valuation would benefit from comprehensive review.
Funding was granted in the 2016/2017 budget, for an in-depth data collection and analysis program, the Revaluation Initiative, to be undertaken to improve the accuracy of the General Valuation. Due to zoning changes, improved structures, occupancy information or changes to a specific market segment, outlier properties are identified, reviewed and where appropriate, corrections applied. Initially, the project was to be completed over a five year period, however following commercialisation of Land Services in 2017, it was amended to three years.
While this is the most comprehensive review undertaken in South Australia in many years, these reviews are best and common practice in other jurisdictions.
The first Cycle has been completed for the 2019-2020 financial year
The program follows a practical plan with two inner metropolitan areas (Unley and Walkerville) and one regional area (Adelaide Plains primary production) identified for the first cycle. This allowed for best practice and data review methodologies to be identified before being adopted for successive areas. The majority of changes were within 0-10% positive or negative movement.
The progression will be largely geographic with inner metropolitan areas to form part of Cycle 2 for the 2020/2021 financial year, and outer metropolitan and some regional areas in Cycle 3, the following financial year.
As the Adelaide CBD market represents a unique and large scale challenge, research is ongoing over the course of the program. As at the date of writing, some sectors, including Residential, Commercial and Industrial Site Values and Residential Capital Values, are planned to take effect for the 2020/2021 financial year, with Commercial and Industrial Capital Values to follow the year after. To ensure the project’s aims of accuracy are met, this program is subject to review. Changes will be communicated to the relevant parties as needed.
Implications and the future
Although the Valuer-General, by definition of the Act, operates independently and does not raise or collect taxes or rates, she is mindful that there may be flow on effects from changes in valuations.
The annual General Valuations come into effect at midnight on the 30th June each year and remain in effect for the financial year. Some Land Owners will receive direct communication from the Office of the Valuer-General, however most are typically notified of their new valuation on receipt of their first rates notice. In the instance of Council Rates, the Valuations are utilised to distribute rates to meet a budget and as such may not result in an increase in rates.
We encourage all Land Owners to review information available at www.dpti.sa.gov.au/land/ovg and other online sources, such as Land Tax calculators, after 1st July.