Rating of your own home assignment

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Table of Contents
Introduction:.................................................................................................................................... 2
Property position:............................................................................................................................ 2
Advising on the trends of surrounding residential market:............................................................. 2
Statutory requirements and their effects: ........................................................................................ 4
Advising on the correct valuation of the property required for rating and tax purposes:............... 5
Report to owner: ............................................................................................................................. 6
Comparable sales to validate the judgment: ................................................................................... 7
Conclusion: ..................................................................................................................................... 8
Reference List:................................................................................................................................ 9
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Introduction:
Rating of house property is the pivot of this study. As it seems, rating of any underlying asset is
necessary for having capital gains. Moreover, a rated asset helps with actual valuation of the
concerned subject. In this context, this study delves into providing adequate information on a
house property situated in Canberra, Australia. For the purpose, relevant statutory obligations
have been analyzed and their applications to the extent of rating and tax obligation of a house
property have been discussed. The report informs that there have been certain discrepancies by
the legal authority in valuing the asset. Therefore, in this report, the researcher has tried to find
out every nook and corner relating to valuation of a house property and on the basis of the facts
the report to the concerned person that is the owner of the property has been informed. Generally
property valuation is done for the following purposes
• Buying and selling of house property
• Transferring a house property to family members
• Capital gain and the tax liability.
Property position:
This project takes up valuing a house in Phillip of Canberra for the requirement. Canberra is the
capital of Australia and is situated in the southeast coast of the Australia’s main land. Due to
high presence of farm land and nature reserve, it is called the Bush Capital.
Advising on the trends of surrounding residential market:
The Canberrian suburb, Philip is well known for its wooden houses and it is the main reason for
which it is called the place of wooden center in Canberra. These wooden houses are the main
attraction to the people. The capital city of the country is achieving a high growth in the field of
housing price. As per the financial report presented by the government for the calendar year 2016
it can be seen that the growth rate of the house price of Canberra is 9.3%. This is much higher
than the other cities of Australia. According to Newell (2015), the southern part of the country
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has a high growth in this regard and the lifestyle of the inhabitants is much better in comparison
to the other part of the country. Related statistical figures show that the price rate for housing in
Canberra is raised by 5.5 percent in the current year, whereas the growth rate of Sydney’s
housing price is 3.2 percent, which is much lower than the Canberra. Therefore, the simple
question that arises here is why the price of the real estate is high here. Bowes & Ihlanfeldt
(2010) has stated that the answer that this place attracting the people of the country by its job
opportunities.
This is the big factor for the current upwards trend in the price of house properties.
In case of other cities, the rest of the Australians are having more part time work, whereas in the
Canberra the rate of fulltime worker is much higher than the part time workers. Full time
employment is required to secure lives. According to Daly et al. (2013) Housing price also
follows the law of demand and supply. In case of Canberra demand for the house is high whereas
the supply is in dearth. In the words of Lorenz & Lützkendorf (2011) population growth of this
city is 1.3 percent for the year 2016 which only precedes New South Wales and Queensland.
Some other key point to attract the people, these are hospitality, restaurant, tourist spot, etc.

Australian government is the regulator of the land or property. They have the control to regulate
its price also. Sometimes the government changes the price or increases the price to control the
population. The government has found out a solution to control the house price rising in the
Canberra. Nowadays the infrastructure development companies are concentrating on developing
residential flats rather than constructing the houses for one family, to provide home for all. In
this city the prices of the house are increasing day by day whereas the price of the residential
flats is not coping up with the price of the house.
Statutory requirements and their effects:
Statutory valuation may be defined as the valuation of something after considering necessary
legal provisions, requirements, purpose for which it is used and the legislation of the country. To
set out the value of any property its underlying purpose must be considered, if the property is
used for the residential purpose then the value will be higher than those considered for the
commercial usage purpose. Government acts play here a vital role to calculate the value of the
house properties. Annual value and the maintenance value are the two factors of valuation of a
property (Wyatt, 2013). Local government’s rate, land tax liability, and rent earned from any let
out property are the statutory purpose of the valuation. According to (Short (2016) the reasons
behind the process of valuation are
• Previously the land was not under the provinces of this city.
• To decide or ascertain the government rates for that particular land in the different area of
this city.
• Whether the land is hold by more than one party.
• The price of the property defer on the interest of the owner.
• If the land is in use for some social work then the valuation is to be done on a moderate
way. etc.
• To sale or buy the property.

In Canberra the government and the local authority maintain its properties value for above
mentioned reason.
Valuation has some effect on the property. By the valuation, owner can get to know the current
rate of his property (Norregaard, 2013). By this process the government can control the rate of
population. It also helps to determine the stander of living of that particular area. In Canberra
population control is a big concern of the government. Valuation of the property helps the
Canberra’s government to bring in new rules and regulations for the people. In addition to this, it
also increases the revenue of the government which only improves the social spending of the
Australian government to improve the lifestyle of its people.
Advising on the correct valuation of the property required for rating and tax purposes:
Discussion on the correct valuation of lands in Australia would depend on the date of valuation
and the use of the property. In this context, the researcher is to mention that lands could be used
for residential purposes or industrial purposes. In this context, the researcher is to mention that
the agricultural use of lands is another aspect of use of lands. In this context, the researcher is to
mention that the valuation technique varies with the use of lands. The valuation department of
Australia considers either of the under mentioned approaches for making valuation of lands.
1. Direct comparison,
2. Summation,
3. Capitalization.
In this context, the researcher is to mention that the valuation team could make valuation by
considering the capitalization method for the agricultural lands. The residential lands are
required to be valued either by direct comparison or summation method as these methods
consider the income from the properties as the base of valuation. As stated by Short (2016), the
valuation of the properties in summation method requires the land valuation index, which could
only be accessed by the Land Revenue Department of the country. On the other hand, the direct
comparison method considers the value of identical houses in the same locality as the base of the
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valuation. Hence, this method could be helpful for computing the value of property by
maintaining the principle of equality. In this context, the researcher is to mention that the
valuation of land by considering the direct comparison method requires computing the gross
value in the initial level. This value is computed by considering the income generated from the
land. In this context, the researcher is to mention that the land property income is to be added to
compute the gross value. This method also considers the legal charges as a deducting factor. This
method could help the land owners to compute the value of lands as the land owners could make
some small adjustments to compute the value of their lands. Moreover, this technique of
valuation does not consider the variables of land variables and therefore, the valuation of land
under this method is easier than other methods.
As per this method of land valuation, the land owners could get the opportunity to compute the
value of land with equality. The parity in income level or probable income level is judged in this
method as this method considers the actual income and the accrual income from that land
property. In this context, the researcher is to mention that the land in Australia could only be
valued by considering this method and for this purpose, the provisions of the Valuation of Land
Act is required to be abided. Furthermore, the researcher is to mention that the value of properties
is required to be made under this method as this method results in the least valuation of assets
(Garling et al. 2013).
As the direct comparison method helps to ascertain the value of land as per the law, the valuation
commission is to undertake this process for the rate computation of a certain land property. On
the other hand, as this process results in low valuation of land also facilities the land owners to
pay a lower amount of tax. Nevertheless, the land owners are to be advised to consider the direct
comparison technique for getting lesser land tax liability.
Report to owner:
Future objection options available to the land owner:

Land owners in Australia could apply various objection options, which include the option to sale
the property. In this context, Gilbert (2016) stated that the land owners in Australia could avail
the option to make conversion of the land by notifying the government. Before making any
further discussion, the researcher is to focus on the conversion process of land. In this context,
the researcher is to mention that the lands are initially agricultural in nature, and therefore, the
agricultural lands are to be converted by the owner for making it usable. Therefore, the
agricultural land could be converted into industrial land or it could be used for domestic use. As
per section 20 of the Valuation of Land Act 1960, owners could make objections if the
conversion of land is made without proper intimation to the land owner. If the owner has
objection regarding the valuation, the owner would have the objective to claim to the valuation
authority of lands in Australia. Therefore, the owner could exercise the option of conversion and
valuation of land.
On the other hand, the researcher is to mention that the land owner could make objection for one
time and therefore, the objection is required to be made by considering the guideline of the
section 21 of the Valuation of Land Act 1960. If the valuation method of land is not agreed by
the owner, the owner of land could also apply to the higher court for revaluation. In this context,
it is also to mention that if the valuation process of land is seen as biased, the owner could apply
for refund of land tax as the land tax is charged on the value of asset. Hence, it is to mention that
the tax refund on the disputed land is another objection option available for the land owners.
Comparable sales to validate the judgment:
The valuation department of the Australia could consider the comparable land valuation
technique in order to charge tax. In this context it is to state that the land valuation department
considers five factors or proposals in order to make the valuation of lands. The vacant land in a
new subdivision is taken as the base of comparative land valuation technique. The value of the
similar houses in the same area is also considered as another valuation tool under this method. In

case of comparative sales, the valuation commission of Australia would require to consider the
selling price of the similar houses to compute the gains or losses. In this context, the researcher is
also required to mention that the comparable sales of land in Australia also need to compute the
gross realization in the initial level. After that the computation of gross realization, the valuation
commission of Australia is to determine the net realization by deducting the legal and
commission on sales at the rate of 6% on the gross realization. After that, the profit and the risk
are to be deducted from the net realization to compute the market value. In this context, the
researcher is to mention that the legal and stamp duty on purchase are deducted from the sales
value to get the market value of the land.
This procedure could be justified by mentioning that the comparative sales value could be
determined by considering little adjustments and therefore, the land owner could also make the
calculation of value of land for taxation purpose. On the other hand, it can be said that this
method facilitates the owners to compute the value of identical lands; therefore this method is
considered as helpful for the land owners. As the comparative sales method facilitates the owners
to make comparative valuation of lands, the owners are recommended to use this method for
making decision of objections.
Conclusion:
Land revenue depends on the tax collection on the land properties and therefore, the valuation of
lands play an important role in the tax structure of Australia. In this study, the researcher has
discussed the land valuation techniques in Australia. In the study, the use of land valuation
techniques is also discussed by considering the three land valuation methods. In the initial stage
of the study, the researcher has advised the land owners to consider the comparative valuation
method for computing the land value and the tax on land property. The researcher has made this
advice as this method results in least value of assets. In this study, the researcher has also
identified that the recent trend of valuation of lands depends on the approach of government
about the tax collection. For this purpose, the researcher has seen that the Australian government

collects tax on lands at the rate of 1.6% of the premium threshold plus $100. On the other hand,
the researcher is to mention that if the threshold value of the land is more than $3357,000,
$45028 is charged for the first $3357,000 and after that 2% on the balance. Moreover, the
researcher has seen that the land owners could make objections in some certain cases as
mentioned in the Valuation of Land Act. The objection could be made for the sales or for
conversion. In case of payment of land tax, the owner could apply the right to objection and
could select the method of land value computation. The owner could also claim to the land
revenue department directly in case of error in the land valuation. The researcher could conclude
the study by mentioning that the owner of land has the right to make objections regarding their
assets.
Reference List:
Bowes, D. R., & Ihlanfeldt, K. R. (2010). Identifying the impacts of rail transit stations on
residential property values. Journal of Urban Economics, 50(1), 1-25.
Daly, J., Gronow, S., Jenkins, D., & Plimmer, F. (2013). Consumer behaviour in the valuation of
residential property: a comparative study in the UK, Ireland and Australia. Property
Management, 21(5), 295-314.
Garling, S., Hunt, J., Smith, D., & Sanders, W. (2013). Contested governance: culture, power
and institutions in Indigenous Australia (p. 351). ANU Press.
Gilbert, J. (2016). Indigenous Peoples' Land Rights under International Law. Brill.
Lorenz, D., & Lützkendorf, T. (2011). Sustainability and property valuation: Systematisation of
existing approaches and recommendations for future action. Journal of Property Investment &
Finance, 29(6), 644-676.
Lützkendorf, T., & Lorenz, D. (2011). Capturing sustainability-related information for property
valuation. Building Research & Information, 39(3), 256-273.
Millington, A. (2013). An introduction to property valuation. Taylor & Francis.
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Newell, G. (2015). The strategic significance of environmental sustainability by Australian-listed
property trusts. Journal of Property Investment & Finance, 26(6), 522-540.
Norregaard, M. J. (2013). Taxing Immovable Property Revenue Potential and Implementation
Challenges (No. 13-129). International Monetary Fund.
Price, O. F., & Bradstock, R. A. (2012). The efficacy of fuel treatment in mitigating property loss
during wildfires: Insights from analysis of the severity of the catastrophic fires in 2009 in
Victoria, Australia. Journal of environmental management, 113, 146-157.
Schwartz, C., Hampton, T., Lewis, C., & Norman, D. (2010). A survey of housing equity
withdrawal and injection in Australia. The Blackwell Companion to the Economics of Housing:
The Housing Wealth of Nations, 147-175.
Short, D. (2016). Reconciliation and colonial power: Indigenous rights in Australia. Routledge.
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Wyatt, P. (2013). Property valuation. John Wiley & Sons.

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