TasFarmers Matters - Farming property council rates need to change

And here we are, back to local government rates. TasFarmers has long been whittling away at the Tasmanian Government in an attempt to get some form of justice for the many primary producers paying far too much in local government rates. At times we feel like the proverbial mosquito biting the elephant on the bum.

TasFarmers has long been prosecuting the case for farmland to be assessed at 2 per cent annual assessed value and that all councils are mandated to levy the same cent in the dollar irrespective of the municipality. 

While many in the local government bureaucracy have squirmed at our advocacy, silence has been the deafening reply from our increasingly under-pressure State Government.

As farmers in nine Tasmanian local government areas would be aware, the Office of the Valuer General has been undertaking property revaluations that will influence council rates and, in some cases, land tax assessments for the coming financial year. 

Landowners have a formal right to object if they believe the assessment is incorrect. The key point to note is that any objection must be made against the valuation itself, not the rates bill that follows. 

A rise in rates is not, on its own, grounds for objection.

When the government has completed the revaluation, property owners will receive a Notice of Valuation from the Office of the Valuer-General. This notice will set out three key amounts:

Land Value – the value of the land excluding improvements.

Capital Value – the total value of the land and improvements.

Assessed Annual Value (AAV) – an estimate of the property’s annual rental value.

These values are used by councils and other government agencies when calculating rates and taxes. The AAV is our main sticking point. Residential real estate is measured at 4 per cent - TasFarmers position for agricultural land is that 2 per cent is a more market aligned percentage.

Property owners who disagree with any of these values have 60 days from the date of receiving the Notice of Valuation to lodge a formal objection. 

This timeframe is important because the opportunity to challenge the valuation may have passed by the time the first rates notice arrives. If significant numbers of landowners challenged the valuation, it would send a clear and unequivocal message to government that farmers are not happy with how property is valued for the purpose of local government taxation.

Of course this can work both ways and valid grounds for objection may include:

The land value has been assessed as being too high or, if it is a tool for the support of financing, too low.

The capital value is inaccurate – a critical point where improvements or repairs have been made.

The Assessed Annual Value does not reflect the property’s true circumstances.

Incorrect information, (or no information), has been used in the valuation process.

Physical, environmental or planning constraints affecting the property have not been properly considered. This might include some of the current challenges such as farm dam safety assessments, dairy effluent management issues and multi-title dairy farms.

As Tasmanian farmers would be acutely aware, factors such as land capability, water access, conservation covenants, easements, native vegetation restrictions, flood risk, access limitations and zoning constraints can all influence value.

Good evidence is the basis of all strong objections. Every farm and district will be different in their circumstances.

Once lodged, the objection is reviewed by the Valuer-General and the process, if conducted properly, should involve discussions with the owner, a review of valuation data and a property inspection. 

If a property owner remains dissatisfied with the outcome, a further appeal right exists under Tasmania’s valuation legislation.

TasFarmers’ practical message is simple: don’t wait for the rates notice. 

Review the Notice of Valuation carefully as soon as it is received, talk to your neighbours and those in similar sectors and seek prompt advice should there be concerns. Missing the 60-day objection period can significantly limit opportunities to challenge a valuation before it is used to calculate future rates and taxes.

Given the scale of current revaluations occurring across Tasmania, farmers should be making the review of their assessments a strong priority.