Valuations for rating and taxing
What are rating valuations?
The Valuer-General is required to maintain valuations of all rateable land in Western Australia for rating and taxing purposes. Your local council rates are assessed using Gross Rental Values (GRVs). These values are assessed at various set times by Landgate valuers to complete what is known as a General Valuation. Every property within your local area is valued at a date set by the Valuer-General and this is referred to as the Date of Valuation (DOV). Rating valuations are therefore assessed at a "snapshot in time" reflecting the property market for your local area at the same date. This ensures consistency and a degree of fairness in the allocation of rates.
What is a GRV?
The GRV is the gross annual rental value of rateable land. The GRV is used by your local council and often by the Water Corporation and Department of Fire and Emergency Services as a basis to determine property rates and service charges.
What is the DOV for my property?
The date of valuation for your property will vary depending on where you live. The Date of Valuation (DOV) brochure shows the valuation date for every local authority in Western Australia.
How is the GRV determined?
All GRVs within your local council are assessed at the same DOV. Rental evidence is collected at that date and used to determine the fair rental value for each property. The rental value for a house will be influenced by factors such as age, construction, size, car shelters, pools and location. By analysing property rents against their individual attributes and characteristics it is possible to assess a valuation for all properties, whether they are rented or not.
What if the market changes significantly between general valuations?
It is unusual for property markets to either remain constant or for various property types to move uniformly. The GRV is currently assessed every three years and despite possible changes to the rental market, the GRV remains fixed until the next general valuation.
How are my rates calculated?
Your council determines their revenue target each year.
A rate in the dollar to be applied to the GRV is struck by dividing the rate collection by the total amount of valuations on the roll. Your rate assessment is calculated by multiplying the GRV by this rate in the dollar. Other charges may also appear on your rate notice such as levies and waste management charges. These are determined by your local council and are not based on the valuation.
Greg's property has a GRV of $1,000 per week or $52,000 per annum.
Greg's local council, where the property is located, has set a rate in the dollar of five cents.
Greg's rates notice would be:
GRV of $52,000 x five cents = $2,600 in rates plus other council levies and charges.
Please note: The GRV remains fixed for three years, however the rate in the dollar value may change each year as this is determined by your local council.
What if I think the GRV is too high?
You can object to the GRV subject to meeting the requirements outlined below.
- Your objection is sent within 60 days of the rates notice being sent out.
- You need to include some rental evidence at or around the date of valuation to show the assessed GRV is too high.
- You can show your assessment is significantly higher than similar properties within your local area.
Please note: Objecting to the GRV because you consider your rates notice or the increase in rates is too high are not valid reasons.
Who do I contact to obtain more information about my GRV?
You can contact the customer care team on +61 (0)8 9273 7373.
urther information on rating and taxing can be found below.
Gross Rental Values (GRVs)
The primary definition of GRV under the Act is as follows:
GRV means the gross annual rental that the land might reasonably be expected to realise if let on a tenancy from year to year upon condition that the landlord was liable for all rates, taxes and other charges thereon and the insurance and other outgoings necessary to maintain the value of the land.
A GRV is determined on the basis that the rental includes outgoings such as rates and other property expenses.
As most commercial rentals are negotiated net of outgoings these need to be added to the net rental to equate to the statutory definition.
The introduction of the Goods and Services Tax (GST) has impacted on the determination of GRV. Where property rental payments are subject to GST, they represent a tax payable by the property owner and are included in the GRV.
Where an annual rental cannot reasonably be determined, the GRV becomes the assessed value. Assessed value is defined in the VLA as a percentage applying to the capital value of land within a particular class.
Residential land for which no rental value can be determined is valued on the basis of three per cent of its total capital value. Assessed value for land designated for other uses is assessed on the basis of five per cent of its total capital value.
Land used for residential purposes only must be valued on the basis of rental value. Any other land with a relatively low rental value in comparison to its capital value may be valued as if it were vacant land.
GRV valuation methodology
A database of rental evidence is assembled from information obtained from a variety of sources.
A schedule of properties rented at the date of valuation is prepared for the area to be valued.
The rented properties are inspected and the rents analysed (for example deductions for furniture included in the letting).
Unsuitable lettings, such as those between related parties, are discarded so that the final list is acceptable as the basis for the determination of fair gross rentals as illustrated by actual market dealings.
From the analysis of actual rentals the fair gross rental of each property is established, after making allowances for any special features or detriments.
The GRV normally represents the annual equivalent of a fair weekly rental. For instance a GRV of $15 600 represents a weekly rental of $300.
Unimproved (land) Values (UVs)
A new UV is determined each year for all land within the State and comes into force on 30 June. UV is defined in the Valuation of Land Act 1978 and in some cases it is a statutory formula. As a broad guide the following applies:
Within a townsite
For land situated within a townsite the UV is the site value of the land. In general, this means the value of the land as if it were vacant with no improvements except merged improvements. Merged improvements relate to improvements such as clearing, draining and filling.
Outside a townsite
The UV of land outside a townsite is valued as if it had no improvements. In this case the land is valued as though it remains in its original, natural state, although any land degradation is taken into account.
If the UV cannot reasonably be determined on this basis, it is calculated as a percentage of the value of the land as if it had been developed to a fair district standard but not including buildings. This percentage is prescribed (where it applies) by the Valuer-General from year to year and is currently 50 per cent.
There are certain exceptions to the above for which the Valuation of Land Act 1978 provides statutory valuation calculations for UV based on formula, for example a fixed rate per hectare or a multiple of the annual rent.
These exceptions include mining tenements, leases under the Land Administration Act 1997 for the purpose of grazing, leases under agreement acts, and land held under the Conservation and Land Management Act 1984.
Section 62(1) of the Strata Titles Act 1985 provides that for UV the Valuer-General must value the whole of the land subject to a strata plan as a single parcel in single ownership. The rating and taxing authority is required to apportion the value in proportion to the unit entitlement, which is shown on the registered strata plan.
Section 62A(2) of the Strata Titles Act 1985 provides that each lot in a survey-strata scheme shall be valued as a separate parcel of land.
UV valuation methodology
Market-based UVs are determined by reference to the land market at the date of valuation. All sales relevant to the predetermined date of valuation are investigated and, where considered necessary, the parties interviewed.
Unsuitable sales, for example sales between related parties or those with special circumstances are discarded. By this process fair and reasonable criteria is established for the fixing of values.