Williams v Chief Executive, Department of Lands
[1996] QLC 14
•21 February 1996
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BRISBANE
21 FEBRUARY 1996
Re: AV95-271 - An Appeal against an Unimproved Valuation
under the Valuation of Land Act 1944
Local Authority: Mackay
G.F & W.P. Williams
v.
Chief Executive, Department of Lands
(Hearing at Mackay)
D E C I S I O N
Mr and Mrs Williams own land described as Lot 31 on Registered Plan 733846, Parish of Bassett, containing 800 m2. It is situated at No. 17 McCready Street, Nindaroo, about 11 km north-west of the Mackay central business district. McCready Street runs parallel and adjacent to the busy Mackay-Bucasia Road.
As at 1 January 1995, the unimproved valuation of the land by the Department of Lands was $40,000. That valuation had resulted from an objection to an original valuation of $41,500. An appeal was filed in the Land Court. A dwelling is constructed on the land and the appellants reside at that address. The grounds of appeal refer to the deleterious effect on the value of the improved property, caused by the unacceptable level of traffic noise and then the presence of industrial workshops and unkempt property opposite. A "temporary dwelling" being occupied by a caretaker of a bowls club is also located on the opposite side of the road. The appellants contend for a valuation of $30,000.
Mr Williams attended the hearing and gave evidence in support of the grounds of the appeal. Basic to the argument is that the market has proved that dwellings in this immediate locality are not capable of being resold for replacement value. Examples were given where owners of improved properties (dwellings and land) valued at $225,000 and $145,000 were forced to accept $177,000 and $115,000 respectively to achieve sales. Another owner had reduced his asking price of the valuation figure of $200,000 to $180,000 but still had been unsuccessful in achieving a sale. It is the appellants' opinion that where market value of improved property is less than the equivalent value of similar improvements but on unaffected land, that reduction in value should not be seen to apply solely to the improvements but should be shared with the land. Important to their considerations was what they saw as an unfair rating burden being carried by improved property which was less valuable than otherwise equivalent property. A reduced rate burden might in their opinion offset some of the market resistance to such improved property.
What the appellants suggest may well be a realistic appreciation of the apportionment of value of improved property, but while it is clearly illogical to them, the unimproved valuation of the land, under the Valuation of Land Act 1944, means (section 3(1)(b)) "in relation to improved land - the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purposes of this Act, the improvements did not exist" (underlining added for emphasis).
The appellants see that as being unfair, but whether it is or not, that is the meaning of unimproved value in terms of the Act. The meaning of the value of improvements is later described in the Act (section 5(1)) as being the added value which the improvements give to the land, irrespective of the cost of the improvements.
It is clear that noise from the traffic causes deleterious effect on the value of the land and I accept that the location and use of industrial workshops and other activities opposite McCready Street do not complement residential use.
The task of the appellants is to prove that, if the land was (for practical purposes) vacant, the valuation of the Department of Lands is too high. They are able to show that "valuations" by others, of the improved value of houses in McCready Street are too high, but in terms of the Act, that may be (if the Department of Lands' valuation is correct) because the "added value" of the improvements is, for the reasons exposed, less and apparently significantly less than replacement cost.
The valuer who took responsibility for the Department of Lands' valuation was Mr L.D. Gilbert, who prepared a report tendered to the Court. He was well aware of the traffic noise and the nature of development generally on the opposite side of the busy road. Although the original valuation of $41,500 had been intended to allow for the disabilities of the location, a further reduction, not only on the subject land but of the other affected properties, had been made subsequent to consideration of the matters raised on the objection. This was intended to ensure that full allowance had been made and that proper relativity between valuations maintained.
Mr Gilbert's investigations had shown that there was no sales evidence of vacant land fronting or adjacent to the Mackay-Bucasia Road, where few vacant lots remained. He investigated sales of vacant land in the vicinity of the subject land and provided details of sales of three lots, in early 1994, the purchase prices being in the range of $50,000 to $57,500. The lots ranged in size from 800 m2 to 988 m2 and the applied unimproved values were in the range of $48,500 to $51,000. Each of these lots enjoyed superior location "in a quieter, more appealing residential street". In Mr Gilbert's professional opinion, support was given by these sales to the valuation applied to the subject land. Relativity issues had also been considered and, for example, lots fronting Anthony Vella Street, and backing onto McCready Street lands had been valued in the range of $5,000 to $6,000 higher than those McCready Street lots. Mr Gilbert had not attempted to investigate sales of improved property.
The question to be answered is not whether allowance has been made for the disabilities, but whether sufficient allowance has been made. The appellants, thinking more in terms of the total house and land package, know that the improved value of their property is significantly affected. While the importance of that to their asset position cannot be understated, they have not addressed properly the requirements of valuations under the Valuation of Land Act. Rating burden is an important consideration to owners of property but this Court is empowered to look at the unimproved value rating base only. In theory the relativity between valuations creates the difference in rating burden and the McCready Street properties have lower unimproved values applied to them than do nearby properties that do not suffer the extent, if any, of the McCready Street disabilities.
Being required to consider this matter on the assumption that, at the date of valuation, the improvements did not exist, I am not convinced on the evidence or by the arguments of the appellants that the land would not have been capable of fetching a price reflecting an unimproved value of $40,000.
The appeal is therefore dismissed and the valuation of the chief executive affirmed.
RE WENCK
MEMBER OF THE LAND COURT
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