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Calendar showing biannual cycles for property valuations in Melbourne for land tax purposes

Understanding Melbourne’s Biannual Property Valuation Cycles for Land Tax

The state of Victoria undertakes statutory valuations of all properties on a regular basis to determine their value for the calculation of land tax. Unlike other states that may value properties every 1-5 years, Victoria has adopted a biannual revaluation system for land tax purposes.

What are Statutory Valuations?

Statutory valuations refer to the official assessment of unimproved property values by the Valuer-General Victoria (VGV). They determine the underlying land value ignoring any buildings or improvements on the site.

These valuations are meant for the entire state and conducted en masse. The VGV may physically inspect only a sample of properties across neighbourhoods. Mass appraisal techniques, market analysis and automated valuation models are used to value all taxable properties.

Biannual Revaluation Cycles

The VGV undertakes statutory valuations of all Victoria properties by 30th June on a 2-yearly cycle. Based on property values as of 1st January that year, fresh valuations are completed in even-numbered years.

So January 2020 valuations were done in 2020, January 2022 valuations in 2022 and so on. New property owners or changes since last valuation are also accounted for.

The benefit of biannual cycles is that it allows for more frequent adjustments in land values compared to longer 3,4 or 5-year cycles. Annual changes in market conditions are captured faster allowing for fairer land tax calculations.

Implications for Land Tax Liability

As land tax is levied on unimproved property value, statutory valuations directly impact the land tax payable. A higher land value means higher tax, while a lower or unfair value can result in overpayment of land tax.

With biannual valuations, property values and hence land tax adjusts every 2 years. If your property has increased faster in value than broader market trends, you may face a sudden spike in land tax.

Conversely, if your property has underperformed or valuation seems excessive, biannual cycles give an opportunity to challenge it sooner and reduce overpayment.

When New Valuations Are Issued

While valuations are done in June, the VGV generally issues notices to property owners in late July or August. The new valuations apply for land tax from the next financial year starting 1st July.

For example, 2022 valuations will be used for 2023-24 land tax bills. This gives time for owners to assess the valuation and object if required before tax bills are issued.

The biannual system aims to allow for more responsive land values. But owners should routinely check their notice to ensure the value is accurate and fair. If not, they can raise an objection against the latest valuation.