Land Valuation Act 2010 Advisory Letter.
Background:You are employed as a property advisor for an independent valuation company on the Gold Coast.
Your client, Mr Investor, has a portfolio of properties on the Gold Coast. He has just received his most recent valuation notices for his properties and after finding it difficult to pay his land tax bill last year, he is seeking your advice to see if there is any way he can get the statutory values on his properties reduced. The properties are all owned in his company name, XYZ Developers, of which he is the sole Director.
Mr Investor feels that three of his properties in particular seem to have values higher than what he thinks they are worth. He has instructed you in writing to advise him of his rights and obligations with regard to the three properties, namely Property A, Property B and Property C, with regard to the valuation notices he has received.
Task:Use the attached information sheet and sales evidence as the basis for your opinion.
Analyse each of the sales in terms of how they could relate to the three properties in order to form your opinion. Provide your analysis under each sale on the attached sheet. This analysis should be included in your assignment submission but should not be provided as an attachment to the letter.
Writea letter to Mr Investor advising him
(a) whether or not he should object to the valuations for 2016
(b) his rights to object, even if you do not advise him to do so
(c) steps for lodging objections if he decides to do so, including how he can object and deadlines for lodging an objection.
Your letter should be no more than two pages long in typed Times New Roman 12 point font with single line spacing and be supported by references to the current statute regarding the valuation of land for land tax purposes in Queensland. Your advice needs to be supported by the relevant sections of the legislation. Do not attach the sections to your letter. Instead, cite the relevant sections and how you have interpreted the section to support your advice.
Any calculations you make to support your advice should be provided in a spreadsheet (for marking purposes). Ensure that you specify any assumptions that you make.
Assignment 1.1 Information sheet
1. The date of valuation for the notices is 1 October 2015.
2. The date of issue for the notices 10 March 2016 with a date of effect of 1 July 2016.
3. The site values and property descriptions for 2015 are as follows:
Property A Site value $295,000
A regular shaped 450 m2cornerinside allotment in a new residential estate in Ormeau Hills. No significant views. The property is zoned RD2. Mr Investor has recently built a new duplex on the site.
Property B Site value $590,000
A regular shaped 650 m2 inside allotment in the beachside suburb of Mermaid Beach, approximately 100 metres from the beach. It is improved with a two level brick and tile duplex built in about 1960. Mr Investor purchased the property before the GFC with the intention of demolishing the existing improvements and building a new unit complex on the site in conjunction with the adjoining site known as Property C. At the time of purchasing the property, he had a quote to demolish the existing improvements for $35,000. He is currently renting out the property to two separate tenants. The property is zoned RD4.
Property C Site value $1,250,000
A regular shaped 1,350 m2inside allotment adjoining Property B. It is improved with a block of six flats built around 1960. Mr Investor purchased the property before the GFC with the intention of demolishing the existing improvements and building a new unit complex on the site in conjunction with the adjoining site known as Property B. At the time of purchasing the property, he had a quote to demolish the existing improvements for $70,000. He is currently renting out the property to three separate tenants. The property is zoned RD4.
The following sales occurred in the few months prior to the date of valuation and can be relied upon for valuation purposes as evidence of market activity. The market has been improving in the last twelve months with an increased number of sales showing shorter selling times and small prices rises since last year.
The following densities apply for the relevant zonings.
Sale Number Land Area Sale Price Site Value Improvements Comments
1 350m2 $270,000 $230,000 Vacant land Inside lot in a newly developed master planned residential estate in the same estate as Property A. The property is zoned RD1. The purchaser has recently built a single dwelling on the site.
2 450m2 $325,000 $280,000 Vacant land Corner lot in a newly developed master planned residential estate in the same estate as Property A. The property is zoned RD2. The purchaser intends to build a single dwelling on the site.
3 550m2 $360,000 $310,000 Vacant land Inside lot in a newly developed master planned residential estate in the same estate as Property A. The property is zoned RD2. The purchaser intends to build a duplex on the site.
Sale Number Land Area Sale Price Site Value Improvements Comments
4 600m2 $600,000 $580,000 Improved property A regular shaped inside allotment within Mermaid Beach, approximately 100 metres from the beach, zoned RD4. The purchaser removed an old fibro cottage was from the site at a cost of $40,000, in preparation for building a block of 4 units on the site.
5 1,200m2 $1,280,000 $1,150,000 Vacant land A regular shaped inside allotment within Mermaid Beach, approximately 100 metres from the beach, zoned RD4. There is a development approval for building a block of units on the site.
6 600m2 $1,600,000 $540,000 Improved property A regular shaped inside allotment within Mermaid Beach, approximately 100 metres from the beach, zoned RD4. The improvements on the site comprise a single unit dwelling built about 2 years ago. The purchaser is living in the house. The added value of the improvements is estimated to be $1,000,000.
ASSIGNMENT 1 ADVISORY LETTER CHECKLIST/MARKING SHEET
Name: ____________________________ Student number: ______________
o Is the letter worded as advice specifically to the client?
o Does it have an introduction, body and conclusion?
o Has it been proofread?
o Is it free from spelling and grammatical errors?
o Has the legislation been referred to correctly?
o Are time periods calculated correctly?
o Is the advice given justified, easy to understand and correct?
o Are supporting assumptions attachedas a spreadsheet, where warranted?
o Are supporting calculations correct?
Your mark for this assignment is _______ out of 20. This assignment contributes to 10% of your overall mark.
SSUD 13-328 SPECIALIST AND STATUTORY VALUATION
Word Limit: 1,500 words ± 10% (excluding Table of Content and list of references)
Assignment Brief: The Gold Coast Rapid Transit Authority has received funding for the second stage of the light rail system. Property owners who will be affected by the light rail extension have received Notices of Intent dated 1 February 2016. You are required to write a report about compensation entitlements for all parties with an interest in the three properties in Middle Street, Gold Coast, which will be impacted by the proposed resumption. For each party, you should state the relevant heads of compensation payable and the methodology that would be used to calculate the compensation.
Construction work is proposed to commence on 1 August 2016. Each lot comprises an area of 494 square metres. The area proposed to be resumed comprises approximately 356 square metres and is shown as the green hatched area on the attached cadastral plan.Current improvementsand their uses for each property are described as follows:
Lot 1 SP13562X is improved with a single dwelling that is currently leased to a takeaway food business operating as Fast and Healthy Food. During the day the business serves many local and passing customers who can always find a car park on the street on Middle Street. The owners of Fast and Healthy Food currently lease the whole premises and live on site. During the construction phase of the proposed light rail extension, no on street parking will be permissible. The current lease will expire on 31 July 2016. The property is owned by Ms Doing Well who has a mortgage on the property held by the Big Bank.
Lot 2 SP13562X is improved with a single dwelling that is currently owner occupied by Mr and Mrs Frugal. They have lived in the house for the past sixty years and have raised their family in the house. The front fence is a timber paling fence and the exposed aggregate driveway will be partly removed by the resumption. The house is set on the rear of the property and is not situated on the part of the lot that will be resumed.
Lot 3 SP13562X is improved with a single dwelling owned by Mr and Mrs Rich who have a mortgage on the property with the Big Bank. The property is currently leased to Spring Back Physiotherapists who have operated their business from these premises for over ten years. The current lease is due to expire on 1st April 2020. The proposed resumption area will mean that the existing dwelling will need to be removed. A bitumen car parking area and rendered concrete block fencing with an electric security gate is also situated in the area that will be resumed from Lot 3.
Your report should refer to relevant Statutory and common law, using the Harvard style of referencing. The scenario is this assignment is fictitious. You do not need to refer to the Planning Scheme to complete this assignment. State any assumptions that you make.
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