Most objections related to rises in land values,the spokesperson said.
Property investors,holiday home owners or landowners and commercial businesses are affected by the valuations. First home buyers can opt to pay an annual property tax instead of an upfront stamp duty payment when buying a home.
“The number of objections varies each year,” the spokesperson said. “If a landowner thinks the land value on their Notice of Valuation is wrong,they have 60 days to lodge an objection with Valuation NSW to have it independently reviewed for free,so more[objections] may follow.”
The next valuation will be undertaken on July 1 this year,he said.
Real Estate Institute of NSW chief executive Tim McKibbin has spoken to home owners who are concerned about the rise in valuations.
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“There are people,depending on the area,that are very concerned about it,” he said. “I would imagine people will make objections,but whether they’re successful is a different thing altogether.”
Valuations are done as “mass valuations” across Sydney,he said,and do not look at individual properties. They do take the sale price of properties in the area into account.
“Valuations look at the land only,what is the highest and best use of the land,and they apply value to that,” McKibbin said. “You can see there’s part art and part science in it,and it’s not a formula you can produce with any level of certainty.”
McKibbin said investors were already selling,and some were looking to invest elsewhere as the cost of land tax rises.
“The valuations that have been made are certainly going to be higher than they were and,as a consequence,subject to council and government making an allowance for the increase in the land value,they will be paying more in rates too,” he said.
Investor selling would add pressure to an already tight rental market in Sydney,where the vacancy rate was just 1 per cent in January.
“That’s going to have a flow-on effect for a lot of people,including tenants,” he said.
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Property Council NSW’s acting executive director Adina Cirson also raised concerns.
“Members are concerned with the massive spike at a time when businesses are already under pressure. The increase would likely be passed onto tenants,which could result in further rent increases,” she said.
“In addition to inflation and cost of construction,this is another bill the industry can’t afford to forecast into development planning,” she said.
The Property Council was heartened,however,by the premier’s plan to shift the way land is valued.
“We would call for a cap on valuation increases in line with the first home buyers’ property tax of 4 per cent,” Cirson said.