list of submissions to the valuation of land and other ... · 3. the risk to the registration...

List of submissions to the Valuation of Land and Other Legislation Amendment Bill 2010 Mr M Rehbein, Development Manager, CBD

Mr D Spragg, Spragg Property Group

Mr A Crawford, Executive Director, Chesterton Corporate Property Advisors

Dr J L Corbett, Dr John L Corbett and Associates

Mr B Vibert, Head of Management, Fortius Funds Management

Mr J Barakat, Director, JB NO.2 Pty Ltd

Mr R Clark, Director, Robert Co Pty Ltd

Mr M Slater, Valuer

Mr D Eades, Chair, Queensland Heritage Council

Mr A Luckhurst-Smith, Executive Chairman, Angas Securities Limited

Ms L Ferro, Director, Highpoint Pty Ltd

Ms C J Parker, Managing Director, Kador Group

Mr S Greenwood, Executive Director, Queensland Division, Property Council of Australia

Mr P Eardley, President, Queensland Law Society

Mr T Sopp, Portfolio Manager, Nielson Properties

Mr G Sciarretta, Queensland Development Manager, Hungry Jacks

Dr M Hefferan, Senior Vice President, Queensland Divisional Council, Australian Property Institute

Mr M Cockburn, Executive Director, Shopping Centre Council of Australia

VALUATON CHANGES FOR UNIMPROVED VALUES Page 1 of 1

From: Michael Rehbein [[email protected]]

Sent: Tuesday, 16 February 20103:09 PM

To: Scrutiny of Legislation Committee

Subject: VALUATON CHANGES FOR UNIMPROVED VALUES

We understand there will be major changes to the valuation of land act, which will siginifcaintly alter allvaluations. Or advisors suggest these changes are unworkable and will be a major deterrent to businessand should not be supported. There is little in the marketplace of the proposed changes.

Please be open about the proposed changes.

SCRUTI NV .-.

16 FEB 20:,

LEGISLATION COMMITTEEMichael RehbeinDevelopment ManagerCBDLevel 1, CBD House, 120 Wickham StreetFortitude Valley (PO Box 355) QLD 4006P 3251 6000 F 3251 6001Email: [email protected]: www.cbdhomes.com.au

NOTICE

This message contains privileged and confidential information intended only for the use of the addressee named above. If you are not theintended recipient of this message you are hereby notified that you must not disseminate, copy or take any action in reliance on it. If you

have received this message in error please notify CSD HOMES Ply Lld Immediately. Any views expressed in this message are those of theindividual sender, except where the sender has the authority to issue and specifically states them to be the views of

CBO HOMES Pty Ltd.

**********

Please be advised that from 12th October 2009 all mail must be addressed to ourPostal Box.

Please update your records accordingly.

Thank you for your understanding.

**********

Message protected by MailGuard: e-mail anti-virus, anti-spam and content filtering.http)/www.1113iIguard.com.au/mf!:

='16/0212010

Message Page 1 of3

----_.__._------------QL-l·\o

From: David Spragg [[email protected]]

Sent: Tuesday, 16 February 20104:00 PM


Cc: [email protected]

Subject: Land Valuations

Spragg Property GroupPO Box 222The Gap Qld 4061Mobile: 0418 733825Private: 07 33002369Fax: 0733004766Email: [email protected]

Attention Ms Kate Jones. Member for Ashgrove

SCRUTINY OF

16 FEB 201C

lEGlSlJ\TfON COMMllTEE

1. The retrospectivity of the legislation is undemocratic. Existing outstanding appeals will nowbe assessed under new rules which differ from the rules that have governed accepted ordecided objections and appeals.

2. The lack of transparency in the objection and appeal process.

• Objections must be made blindly with knowledge only of a figure believed by theowner to be incorrect. Prior to this Bill an owner whilst in this position at objection stagehas far more understanding of the logic behind that figure prior to lodging an appeal.

• All grounds of objection must be fully stated and detailed.

a Included in the documentation that must be attached to the objection isdocumentation that could only be used to change the basis on which the valuationwas originally undertaken to the proviso method.

• The grounds of appeal are limited to those contained in the objection even if thevalue is assessed on an entirely different basis being the proviso method.

• The State Valuation Service, can unilaterally lapse an objection without any recourse.Even if done vindictively, which is not uncommon with some in the SVS, the objectionwill remain lapsed. We cannot allow SVS to have such power.

3. The risk to the registration of State Valuation Service Valuers

• It is impossible to undertake the initial unimproved valuation by the proviso methodunless an improved valuation is undertaken together with a full valuation of theimprovements.

• To originally undertake the valuation using the proviso method must be done withoutdocumentation and to do value without this information would be negligent.

In order to value the property including added improvements such as value of leases,value of infrastructure credits and value of goodwill. detailed information on thosecomponents must be known but is not available at first instance to the valuer. Toundertake a valuation without that information is negligent.

• Any Valuer who is negligent is subject to disciplinary action under the ValuersRegistration Act including loss of registration.

4. The assault on the Judicial Process is intolerable. The Land Appeal Court together with thesupport of the Court of Appeal decided the Pacific Fair case in accordance with thelegislation that has existed since 1944 (subject to the 2008 amendments). The Court wouldbe excused in asking the question as to why they exist if, whenever the law is interpreted in

1610212010

Message Page 2 0[3

accordance with how it always has been, the legislation is changed by the government to reflect itsown failed position. It would be far easier to just change the legislation to suit the governmentscontention rather than go through the costly court procedure. If we are unable to rely on thecourts to apply the law there is no transparency in the system and we should not bluff ourselvesthat there is.

5. The proposed legislation is far wider reaching and inclusive of all of the initially proposedamendments that were abandoned as unjust in 2008. The parliament agreed they were unjustthen and they are still unjust.

6. The valuation system is unworkable. The expertise to complete the valuations in accordancewith this proposed legislation must result in inequities.

a SVS valuers do not have the expertise to assess goodwill, a fact recognised by seniormembers in the Department at a briefing of private valuers on 15 February in the DERMoffices.

SVS valuers do not have the resources to undertake the necessary individual assessmentsthat this legislation demands.

.. SVS valuers are unable to calculate infrastructure charges. Even experienced TownPlanners have difficulty and in some Council areas such as Gold Coast even the Council willconfirm they are unable to undertake such a calculation.

7. The legislation will skew valuations of similar parcels of land. Take for instance nine adjoiningparcels of land all with totally similar characteristics. All nine, if assessed in accordance with theproposed legislation will now have quite different unimproved values.

" Vacant land with no development approval.

.. Vacant land with development approval.

11 Vacant Land with development approval and an agreement to lease in place.

.. A partially built building without an agreement for lease in place.

That same building with an agreement for lease in place.

a A fully completed building without a tenant in place.

That fully completed building with a tenant in place and

a That fully completed building with a tenant in place where that tenant adds significantcovenant to the value of the improved property.

" That same property will keep changing value according to the term remaining on thelease.

8. The concept of suggesting that the value of improvements cannot be more than thedepreciated value in the books of account, if any. This concept further moves away frommarket value. Books of Account are used for taxation purposes and not market value.Spencer's case has been the fundamental basis of valuation for the last century. The proposedamendments would serve to abandon Spencer's Case by introducing a contrived and artificialconcept of value of improvements.

9. The artificiality of this concept could be demonstrated by having regard to a heritage propertyfor instance. The improvements on a heritage property, by their very nature would havealready been written off but, certainly have a market value. Surely Parliament does not intendthat a heritage property be assessed on its improved value and this made retrospective.Consider the fact that the added value of the leases are no longer regarded as improvementsand therefore there is arguably no difference between the market value of the property andthe unimproved value.

10. Whilst the above matters relate to a small number of the many failures in terms of practicalityand the ramifications of this Bill there are still many other absurdities:

16/0212010

Message Page 3 of 3

~ Taxing Entrepreneurial Profit

Taxing Development Profit

Taxing Goodwill

~ The admission that leases and goodwill are improvements (DERM Brochure entitled litheValuation of Land and Other Legislation Amendment Bill 201 a") and claiming theseimprovements have always been deemed to be part of the unimproved value.

11. Whilst this Bill may appear as though it will achieve an immediate financial solution it will not. Itwill follow the fate of the 2003 amendments which were also unworkable and will be deemednever to have been made.

12. The deception of the Bill will serve to make Queensland a risky place to invest. If theGovernment was up front it would adjust taxation rates which, whilst unpalatable, at least hassome honesty and transparency. Those looking to further invest in Queensland will look hard atthis deception and the inequities the system creates.

13. The fact that tenants are now liable to pay land tax under amendments to the Land Tax Act1915 passed in 2009 will broaden the base of those adversely affected by this Bill.

14. The Bill must not be guillotined through parliament until properly considered. If the Act needsoverhauling it should be done with public consultation and proper thought. This Bill has not hadthe benefit of public consultation and is ill-thought. The debate must adjourned Whilst the issuesare properly considered.

Yours faithfully

David J Spragg HDA, FAIV

Spragg Property Group

PO Box 222

The Gap Qld 4061

16/0212010

16 February 2010

The Research DirectorScrutiny of Legislation Committee

By Email: [email protected]

Dear Sir

Chesterton "

r----_. _SCRUTlNY-QF-

.17 FEB 2010

lEGISLATION COMMITTEE~'1. \0

RE: VALUATION OF LAND AND OTHER LEGISLATION AMENDMENT BILL 2010

We are writing to express our concern regarding the above Bill introduced to Parliament on 11February 2010. Please find below a list of our concerns which we strongly believe need to begiven due consideration.

1. The retrospectivity of the legislation is undemocratic. Existing outstanding appeals will nowbe assessed under new rules which differ from the rules that have governed accepted ordecided objections and appeals.


" Objections must be made blindly with knowledge only of a figure believed by theowner to be incorrect. Prior to this Bill an owner whilst in this position at objectionstage has far more understanding of the logic behind that figure prior to lodging anappeal.

All grounds of objection must be fully stated and detailed.

.. Included in the documentation that must be attached to the objection isdocumentation that could only be used to change the basis on which the valuationwas originally undertaken to the proviso method.

" The grounds of appeal are limited to those contained in the objection even if thevalue is assessed on an entirely different basis being the proviso method.

The State Valuation Service can unilaterally lapse an objection without any recourse.Even if done vindictively, which is not uncommon with some in the SVS, the objectionwill remain lapsed. We cannot allow SVS to have such power.

3. The risk to the registration of State Valuation Service valuers.

It is impossible to undertake the initial unimproved valuation by the proviso methodunless an improved valuation is undertaken together with a full valuation of theimprovements.

To originally undertake the valuation using the proviso method must be done withoutdocumentation and to value without this information would be negligent.

Our Ref: CCPA/2010/VOLA Amendment Bill

Ye' 073222 3000 Fay 07 3832 2001 pru) brisbane@chesterton,com.au Ner,;. www.chesterton.com.au

100 Wharf street rCm AnnStreetJ BrisbaneQ 4000 "'00' GPO Box 2533 BrisbaneQ 4001

A Chester/on Group Company I Cheslerton Vdualions (Q/d) Ply Lld Trading osChester/on Corporate Property AdvisorsACN 100543415 ABN 96100543415

Chesterton

Re: Valuation Of Land And Other Legislation Amendment Bill 2010

In order to value the property including added improvements such as the value ofleases, the value of infrastructure credits and the value of goodwill, detailedinformation on those components must be known but is not available at first instanceto the valuer. To undertake a valuation without that information is negligent.

Any valuer who is negligent is subject to disciplinary action under the ValuersRegistration Act. including loss of registration.

4. The assault on the Judicial Process is intolerable. The Land Appeal Court together with thesupport of the Court of Appeal decided the Pacific Fair case in accordance with thelegislation that has existed since 1944 (subject to the 2008 amendments). The Court wouldbe excused in asking the question as to why they exist if, whenever the law is interpreted inaccordance with how it always has been, the legislation is changed by the Governmentto reflect its own failed position. It would be far easier to just change the legislation to suitthe Governments contention rather than go through the costly court procedure. If we areunable to rely on the courts to apply the law there is no transparency in the system and weshould not bluff ourselves that there is.

5. The proposed legislation is far wider reaching and inclusive of all of the initially proposedamendments that were abandoned as unjust in 2008. The Parliament agreed they wereunjust then and they are still unjust.

6. The valuation system is unworkable. The expertise required to complete the valuations inaccordance with this proposed legislation compared with the level of expertise availablemust result in inequities.

SVS valuers do not have the expertise to assess goodwill, a fact recognised by seniormembers in the Department at a briefing of private valuers on 15 February in theDERM offices.

" SVS valuers do not have the resources to undertake the necessary individualassessments that this legislation demands.

" SVS valuers are unable to calculate infrastructure charges. Even experienced TownPlanners have difficulty and in some Council areas such as Gold Coast even theCouncil will confirm they are unable to undertake such a calculation.

7. The legislation will skew valuations of similar parcels of land. Take for instance nineadjoining parcels of land all with totally similar characteristics. All nine, if assessed inaccordance with the proposed legislation will now have quite different unimprovedvalues.

Vacant land with no development approval.

Vacant land with development approval.

Vacant land with development approval and an agreement to lease in place.

A partially built building without an agreement for lease in place.


A fully completed building without a tenant in place.

That fully completed building with a tenant in place.

That fully completed building with a tenant in place where that tenant addssignificant covenant to the value of the improved property.

Page 2 of 316 February 2010

Re: Valuation Of Land And Other Legislation Amendment Bill 2010

That same property will keep changing value according to the term remaining on thelease.

8. The concept of suggesting that the value of improvements cannot be more than thedepreciated value in the books of account, if any. This concept further moves away frommarket value. Books of account are used for taxation purposes and not market value.Spencer's case has been the fundamental basis of valuation for the last century. Theproposed amendments would serve to abandon Spencer's Case by introducing acontrived and artificial concept of value of improvements.

9. The artificiality of this concept could be demonstrated by having regard to a heritageproperty for instance. The improvements on a heritage property, by their very naturewould have already been written off, but certainly have a market value. Surely Parliamentdoes not intend that a heritage property be assessed on its improved value and this maderetrospective. Consider the fact that the added value of the leases are no longerregarded as improvements and therefore there is arguably no difference between themarket value of the property and the unimproved value.

10. Whilst the above matters relate to a small number of the many failures in terms ofpracticality and the ramifications of this Bill there are still many other absurdities:

a Taxing Entrepreneurial Profit;

Taxing Development Profit;

a Taxing Goodwill and;

The admission that leases and goodwill are improvements (DERM Brochure entitled"Valuation of Land and Other Legislation Amendment Bill 2010") and claiming theseimprovements have always been deemed to be part of the unimproved value.

11. Whilst this Bill may appear as though it will achieve an immediate financial solution it willnot. It will follow the fate of the 2003 amendments which were also unworkable and willbe deemed never to have been made.

12. The deception of the Bill will serve to make Queensland a risky place to invest. If theGovernment was up front it would adjust taxation rates which, whilst unpalatable, at leasthave some honesty and transparency. Those looking to further invest in Queensland willlook hard at this deception and the inequities the system creates.

13. The fact that tenants are now liable to pay land tax under amendments to the Land TaxAct 1915 passed in 2009 will broaden the base of those adversely affected by this Bill.

14. The Bill must not be guillotined through Parliament until properly considered. If the Actneeds overhauling it should be done with public consultation and proper thought. This Billhas not had the benefit of public consultation and is ill-thought. The debate must adjournwhilst the issues are properly considered.

(~u;~ faithfullyY;TERTON 'RPORATE P OPERTY ADVISORS

Alien J Crowfor F.R.I.C.S. FAP.1.Executive Director

__ J' -:~::~ • : ;r:'_;,

..-

Page 3 of 316 February 2010

(Dr (JOi'1H L C01-be-tt c\r' SZts50cintc5'-

;'.;.. B ~ -. \1-... I f;~ f' ~ ~ f·' ~}1~a • ~';.!J d/l, '.~,1 I" :.: 1.'

Consultant NeurologistCredentialled Sleep Physician

: 59 Nerong Street.Sou!hpc;r: QUEeJ"..stC1nd 4215

Tei. {O:?! 55570000Fe.-._ iO;~ 5531 1277

Emoll Gdrnjn·':--c..:·~b.?rt.ct'Jm.-a1J

17 February 2010

The Research DirectorScrutiny of Legislation CommitteeParliament HouseGeorge StreetBRISBANE QLD 4000

Via email: [email protected]

Dear Sir,

SCRUTINY OF

J 7FEB 20m

LEGISLATION COMMrrJEE

Re: Valuation of Land and Other Legislation Amendment Bill 2010

I am appalled that yet another piece of oppressive, retrospective bill-consideredlegislation is being contemplated in respect of the above legislation, which I understandis to be put to parliament in the immediate future.

I write because of the fact that I own property within your electorate and have alreadybeen adversely affected by the Bligh Government's amendments to the Land Tax Act1915 passed in 2009.

The proposed new legislation is arrogant and offensive - having lost its appeal in theCourts, the Bligh Government now proposes a bizarre solution which is doubly offensivethrough incorporating a retrospective change in the law.

This proposed new law will adversely affect a vast number of Landholders inQueensland and will tell the rest of Australia that Queensland is a bizarre place wherethe Bligh Government has no respect for normal commercial and legal principals, and nounderstanding of the usual processes of accounting and property valuation. Thisinevitably worsens business uncertainty and is more akin to rule by decree and the"heads I win, tails you lose" principle.

I enclose a more detailed commentary on this appalling proposal, I strenuously object toit, and I ask you to do the same.

Yours sincerely,

Dr John L Corbettjlc:tg

Encl.

1. The retrospectivity of the legislation is undemocratic. Existing outstanding appeals willnow be assessed under new rules which differ from the rules that have governedaccepted or decided objections and appeals.


.. Objections must be made blindly with knowledge only of a figure believed by theowner to be incorrect. Prior to this Bill an owner whilst in this position at objectionstage has far more understanding of the logic behind that figure prior to lodging anappeal.

.. All grounds of objection must be fully stated and detailed.

.. Included in the documentation that must be attached to the objection isdocumentation that could only be used to change the basis on which the valuationwas originally undertaken to the proviso method.

.. The grounds of appeal are limited to those contained in the objection even if thevalue is assessed on an entirely different basis being the proviso method.

a The State Valuation Service, can unilaterally lapse an objection without any recourse.Even if done vindictively, which is not uncommon with some in the SVS, the objectionwill remain lapsed. We cannot allow SVS to have such power.


.. It is impossible to undertake the initial unimproved valuation by the proviso methodunless an improved valuation is undertaken together with a full valuation of theimprovements.

a To originally undertake the valuation using the proviso method must be done withoutdocumentation and to do value without this information would be negligent.

.. In order to value the property including added improvements such as value ofleases, value of infrastructure credits and value of goodwill, detailed information onthose components must be known but is not available at first instance to the valuer.To undertake a valuation without that information is negligent.

.. Any Valuer who is negligent is subject to disciplinary action under the ValuersRegistration Act including loss of registration.

4. The assault on the Judicial Process is intolerable. The Land Appeal Court together withthe support of the Court of Appeal decided the Pacific Fair case in accordance with thelegislation that has existed since 1944 (subject to the 2008 amendments). The Courtwould be excused in asking the question as to why they exist if, whenever the law isinterpreted in accordance with how it always has been, the legislation is changed by thegovernment to reflect its own failed position. It would be far easier to just change thelegislation to suit the governments contention rather than go through the costly courtprocedure. If we are unable to rely on the courts to apply the law there is notransparency in the system and we should not bluff ourselves that there is.

5. The proposed legislation is far wider reaching and inclusive of all of the initially proposedamendments that were abandoned as unjust in 2008. The parliament agreed they wereunjust then and they are still unjust.

6. The valuation system is unworkable. The expertise to complete the valuations inaccordance with this proposed legislation must result in inequities.


.. SVS valuers do not have the resources to undertake the necessary individualassessments that this legislation demands.

" SVS valuers are unable to calculate infrastructure charges. Even experienced TownPlanners have difficulty and in some Council areas such as Gold Coast even theCouncil will confirm they are unable to undertake such a calculation.

7. The legislation will skew valuations of similar parcels of land. Take for instance nineadjoining parcels of land all with totally similar characteristics. All nine, if assessed inaccordance with the proposed legislation will now have quite different unimprovedvalues.

.. Vacant land with no development approval.


.. Vacant Land with development approval and an agreement to lease in place.

R A partially built building without an agreement for lease in place.

.. That same building with an agreement for lease in place.


D That fully completed building with a tenant in place and

.. That fully completed building with a tenant in place where that tenant addssignificant covenant to the value of the improved property.

That same property will keep changing value according to the term remaining onthe lease.

8. The concept of suggesting that the value of improvements cannot be more than thedepreciated value in the books of account, if any. This concept further moves away frommarket value. Books of Account are used for taxation purposes and not market value.Spencer's case has been the fundamental basis of valuation for the last century. Theproposed amendments would serve to abandon Spencer's Case by introducing acontrived and artificial concept of value of improvements.

9. The artificiality of this concept could be demonstrated by having regard to a heritageproperty for instance. The improvements on a heritage property, by their very naturewould have already been written off but, certainly have a market value. SurelyParliament does not intend that a heritage property be assessed on its improved valueand this made retrospective. Consider the fact that the added value of the leases are no

longer regarded as improvements and therefore there is arguably no difference betweenthe market value of the property and the unimproved value.

10. Whilst the above matters relate to a small number of the many failures in terms ofpracticality and the ramifications of this Bill there are still many other absurdities:

B Taxing Entrepreneurial Profit

B Taxing Development Profit

B Taxing Goodwill

B The admission that leases and goodwill are improvements [DERM Brochure entitled"the Valuation of Land and Other Legislation Amendment Bill 2010") and claimingthese improvements have always been deemed to be part of the unimproved value.

11. Whilst this Bill may appear as though it will achieve an immediate financial solution it willnot. It will follow the fate of the 2003 amendments which were also unworkable and willbe deemed never to have been made.

12. The deception of the Bill will serve to make Queensland a risky place to invest. If theGovernment was up front it would adjust taxation rates which, whilst unpalatable, at leasthas some honesty and transparency. Those looking to further invest in Queensland willlook hard at this deception and the inequities the system creates.


14. The Bill must not be guillotined through parliament until properly considered. If the Actneeds overhauling it should be done with public consultation and proper thought. This Billhas not had the benefit of public consultation and is ill-thought. The debate mustadjourned whilst the issues are properly considered.

17 February 2010


Dear Sir,

SCRUTINY OF

',11 FEB 2010

LEGISLATION COMMITTEE---~I' h::)

RE: SUBMISSION OPPOSING THE VALUATION OF LAND AND OTHER LEGISLATIONAMENDMENT BILL 2010

As a representative of Fortius Funds Management Pty Ltd (Fortius), an owner of commercial officebuildings in Fortitude Valley, I hereby submit the following comments, prepared by a consultantvaluer, who represents Fortius in respect of Land Valuation matters. These are important issues thatrequire further consideration and public consultation before such legislation is passed.

1. The retrospectivity of the legislation is undemocratic. Existing outstanding appeals will now beassessed under new rules which differ from the rules that have governed accepted or decidedobjections and appeals.


" Objections must be made blindly with knowledge only of a figure believed by the owner tobe incorrect. Prior to this Bill an owner whilst in this position at objection stage has farmore understanding of the logic behind that figure prior to lodging an appeal.


,. Included in the documentation that must be attached to the objection is documentationthat could only be used to change the basis on which the valuation was originallyundertaken to the proviso method.

" The grounds of appeal are limited to those contained in the objection even if the value isassessed on an entirely different basis being the proviso method.

u The State Valuation Service, can unilaterally lapse an objection without any recourse. Evenif done vindictively, which is not uncommon with some in the SVS, the objection will remainlapsed. We cannot allow SVS to have such power.


Fortius Funds Management Pty Limited ABN 90 093 111 641

Level 4, 88 Phillip Street, Sydney 2000 T: +61 292310399 F: +61 29231 0279

It is impossible to undertake the initial unimproved valuation by the proviso method unlessan improved valuation is undertaken together with a full valuation of the improvements.

To originally undertake the valuation using the proviso method must be done withoutdocumentation and to do value without this information would be negligent.

In order to value the property including added improvements such as value of leases, valueof infrastructure credits and value of goodWill, detailed information on those componentsmust be known but is not available at first instance to the valuer. To undertake a valuationwithout that information is negligent.

Any Valuer who is negligent is subject to disciplinary action under the Valuers RegistrationAct including loss of registration.

4. The assault on the Judicial Process is intolerable. The Land Appeal Court together with thesupport of the Court of Appeal decided the Pacific Fair case in accordance with the legislationthat has existed since 1944 (subject to the 2008 amendments). The Court would be excused inasking the question as to why they exist if, whenever the law is interpreted in accordance withhow it always has been, the legislation is changed by the government to reflect its own failedposition. It would be far easier to just change the legislation to suit the governments contentionrather than go through the costly court procedure. If we are unable to rely on the courts toapply the law there is no transparency in the system and we should not bluff ourselves that thereis.

5. The proposed legislation is far wider reaching and inclusive of all of the initially proposedamendments that were abandoned as unjust in 2008. The parliament agreed they were unjustthen and they are still unjust.

6. The valuation system is unworkable. The expertise to complete the valuations in accordancewith this proposed legislation must result in inequities.

SVS valuers do not have the expertise to assess goodwill, a fact recognised by seniormembers in the Department at a briefing of private valuers on 15 February in the DERMoffices.

" SVS valuers do not have the resources to undertake the necessary individual assessmentsthat this legislation demands.

" SVS valuers are unable to calculate infrastructure charges. Even experienced Town Plannershave difficulty and in some Council areas such as Gold Coast even the Council will confirmthey are unable to undertake such a calculation.

7. The legislation will skew valuations of similar parcels of land. Take for instance nine adjoiningparcels of land all with totally similar characteristics. All nine, if assessed in accordance with theproposed legislation will now have quite different unimproved values.

" Vacant land with no development approval.


l< Vacant Land with development approval and an agreement to lease in place.

" A partially built building without an agreement for lease in place.

s,; That same building with an agreement for lease in place.

" A fully completed building without a tenant in place.

" That fully completed building with a tenant in place and

I~ That fully completed building with a tenant in place where that tenant adds significantcovenant to the value of the improved property.

ff That same property will keep changing value according to the term remaining on the lease.

8. The concept of suggesting that the value of improvements cannot be more than the depreciatedvalue ;n the books of account, if any. This concept further moves away from market value.Books of Account are used for taxation purposes and not market value. Spencer's case has beenthe fundamental basis of valuation for the last century. The proposed amendments would serveto abandon Spencer's Case by introducing a contrived and artificial concept of value ofimprovements.

9. The artificiality of this concept could be demonstrated by having regard to a heritage propertyfor instance. The improvements on a heritage property, by their very nature would have alreadybeen written off but, certainly have a market value. Surely Parliament does not intend that aheritage property be assessed on its improved value and this made retrospective. Consider thefact that the added value of the leases are no longer regarded as improvements and thereforethere is arguably no difference between the market value of the property and the unimprovedvalue.

10. Whilst the above matters relate to a small number of the many failures in terms of practicalityand the ramifications of this Bill there are still many other absurdities:

I~ Taxing Entrepreneurial Profit

" Taxing Development Profit

<! Taxing Goodwill

.. The admission that leases and goodwill are improvements (DERM Brochure entitfed "theValuation of Land and Other Legislation Amendment Bill 2010") and claiming theseimprovements have always been deemed to be part of the unimproved value.

11. Whilst this Bill may appear as though it will achieve an immediate financial solution it will not. Itwill follow the fate of the 2003 amendments which were also unworkable and will be deemednever to have been made.

12. The deception of the Bill will serve to make Queensland a risky place to invest. If theGovernment was up front it would adjust taxation rates which, whilst unpalatable, at least hassome honesty and transparency. Those looking to further invest in Queensland will look hard atthis deception and the ineqUities the system creates.

13. The fact that tenants are now liable to pay land tax under amendments to the Land Tax Act 1915passed in 2009 will broaden the base of those adversely affected by this Bill.

14. The Bill must not be guillotined through parliament until properly considered. If the Act needsoverhauling it should be done with public consultation and proper thought. This Bill has not hadthe benefit of public consultation and is ill-thought. The debate must adjourned whilst the issuesare properly considered.

I trust that these issues will be reviewed and taken into consideration.

Yours faithfully,

BRYAN VIBERTHead of Management

J8 NO.2 PTY LTDAS TRUSTEE FOR J8 30. 2 FAMILY TRUST

FORTI1TDE \',\LLf.Y Q -'V::~

1-: Februart 2010

The Research DirectorScrutiny of Legislation CommitteeParliament HouseGeorge Stree'tBRISB.ANE Q 4000

D==.ar SIr/Madam

SCRUTINY OF

17 FEB 2010

LEGISLATION COMMITTEE.

TCh;,t:-at:J111C:" ~iJi' ~:.$.:..U, r}~ll 1

F~{. "df!n!r iU'" I jh~f} (}~tI'O

RE: VALUATION OF LAND AND OTHER LEGISLATION AMENDMENT BtU 20fO

As a property owner, I hereby object to the passing of this BW and seek your assi.stan eIn this matter. I detarl my objections as follows:-

'I, Th£' retrospeetivity of the legis,latlon Is undemocratic. Existing outstanding a.ppeaiswill now he a.sseS5 und~r new rules '. hlrh differ frorn the rul~s thar ha'legovern€' accepted Of decided o-bje tions a d appeak-.

2 Th'? lack 01 transparency in th~ obie iOn iifld appeal proce5s

Objections must b ,. ade blindly with knowledge only of a figure believed bythe owner to be Incorrect. PrIor to this Bill an O~\ net whilst in this position atobjection stage has far more understanding of he logic behind that fl911re priorto lodging an appeal.

~ All gfotJnds of objection must be fully S aled and detailed

~ lnciuded in the document ion that must be attached to the. objection IS

docum':!i1tation that could only ce used to chang.e the basis on which the\ . u,:'\iion '>'as onginal1y und Jken to the proviso method

The grounds of appeal are' limIted to thoSoc: contain ...·: '" the: objection even ifrhe value is assessed on an enttr'ely diff.er~nt basis being the proviso method.

Th~ State Valuation S€'fllice, can unilaterally lapse an objection without anyreCOllrS'? Even If done vindictIvely. which is not uncommon with SOl11e In theSVS rhe objecfion will remain lapsed. We cannot allow SVS to have }uch power

2

3 The risk to the registration of State Valuation Service Valuers

It is impossible to undertake the initial ummproved va!uat.lon by the provisomerhod unie-ss an lmprov~d valuation is undertaken together witn a tu!!valuation of the improvements_

TO originally undi:rtake ine valuat~on using the provl!>o method must be dtH1€without documentation and to do value without this information would benegligent

~ In order to value the prTl_perty including added improvements such as value ofleas€s, VCllu:.- of infrastructure cft::dits and value of goodwill, detailidinfO(ma~lon on those components lTll.yt be knU'-.vn blJt is not avail _bl ~t l1'stinstance to the Vah.l€L Ta undertak~ a valuation without that information isnegfigt:nL

Any Valuer who is negligent is subject to disciplinary action under the ValuersRegistration Act InducHng loss of registration

4 The ass vII on the JudidaJ Pro,cess is in'olerable, The La/id Apperll Court together..vi h th'" '5Upport <)f the Court oj Appeal decided the Pacific Fair case in accordanc-'with the I~gjs:a~ion that has ~xlsted since 1944 (subject to the 2008 amendments].The COlJrt v/ould be exc!Jsed in asking the qu€stJon as to why they exist if.whenever tile law is interpreted in accordanco with how it afwa'ls has been, thelegislation is change.d by the Government to reJl~<.l it'S own failed position. It wouldbe far Easier 0 Just change the legislation to suit thE GovemmRnt's contentionr<Lh ( han g-o hfough the co5tly court procedure_ If ear!;! unable to rely on thecou 5 LV apply the la th::.=re i:- no transparency in the system and we should ne,"bluff ourseclve.s that there is_

5 The proposed legisla1iofl is far wider reaching and inclusive of ail of the injti~lll\t

proposed amendments that were abandoned as unjust in 2008_ The parllam..:f1tagreed l't ey wert: unjust then and they ar~ still unjust-

6 The valua ion ~Y5iem 15 un lorkilbl , Th~ expertise to complete th~ vaJuatIons illaccor' anc<' :::!rh this proposed legislaUon must re'1ult In meQuitieS

SVS valuers do not have the expertise to assess goodwill. a fact recognised bys<'nror members in the Department at a briefing of privi\{~ valuers on I 5Fe-hI U-2r in rhe DERf,,1 offices_

5'·/5 ,.'altier:; do not have .h~ resources la undertake lhe necess<Uy Indlv!dualassessments that thIS iegisla lOn demands

svs valtJer~ are unable to caJculate mfraSlrueture charges_ E\fen e:t:penencedTown Planners havE' difficult)' and In somE' Ccunel areas ~uch as Gold Coastp"en the Council .-vdl confirm they are unable to undertake such a calCUlation

3.

7 The legis1ation will st.e\·,,1 valuatlons of stmliar parcel:'. of land. Take for instancenine adjoining parcels of land all with totally sImilar characteristics. All ninE. Ifassessed in accordance ,Nlth the proposed legislation viill nOIf>' have quite differentunimproved values.

Vacant land with OD development approval

Vacant land with de 'clopment approval.

Vacant Land wIth development approval and an agreement to lease in place,

• A partially built building without an a-greement for lease In place.

~ That same building with an agreement for lease in place.

A fully completed oLiilding "Hhout a tenant in place.

That fu11v completed building with a t€ni.\l1t in place and

That fully completed building wIth a tenant in place where that tenant addssignificant covenant to the value of the improved property.

That same propel' , ... ill ke~p chang' I1g vahH~ accordlllCl to th term nemainingon thE' lease

8. Tb.€' earlrept of suggesting that 'the value of improvements cannot b-e mote than thedepredcat~d value in the books of account, if any. This concept furtl'reT moves awayfrom market value. Books of Accoum are used for taxation purposes and notmarket value.. Spencer's case has been the fund~m@nt!l basis of \laluation for thelast century. The proposed amendments \liould servi: to aba:ndon Spencer's Case byIHlroolldng it contrived and artificial concept of value of imprOvem-eJ115.

9, ThE arti "lciality of this concept could be de.monstrated by having regard to aheritag'!; propert" for instance. The Empro 'emen s on a heritage property, by theirvery nature would have already been wrItten off but, certalrtly hav~ a markel value.Surely Parliament does not intend that a heritag~ property be assessed on itsimproved value and thiS made retrospect.ive, Consider th\~ fact that the added valueof the lease'S are no longer r>egan:led ss Improv,-ment5 and therefore there 1£

arguably no dlffNenc'" between the market value of the propelty and theunimproved valu~

10, Whilst the above matters relate to a small number of the many fallures in terms ofpracticality and the ramifications of this Bill there are still many other absurdities

Taxing Entrepreneurial Profit

Ta·,iIl9 De 'el.opm,,"nt Profit

TaXfl19 GoodWill

The adm!sslon that leases and goodwill are improvements iDERM BrochureentItled "lhe Valuation of Land and Other Legislation Amendment Bill 2010"}and claiming these Improvem'2nts have ah.'.'",;,> heen deemed to be pan of theLHltmproved 'lalu€.

i j Whdst thIS Bill may appear as though It will achreve an Immediate financial sotutlonIt wiii not It Will foHow the fate of the 2003 amendments which were alsounworkable and .viil be deemed never to have been made

12. The deception of tile Bi!l wlil serve to makE: Queensland a risky place to 1l1VeSl. Ifthe Govenlment was up front it would adjust taxation rates which vt'h;!H

unpalatable. at iea5t has; SDm!:? honesty and transparency. Those: rooking to funht'rInvest In Queensland WIll look hard at this deception and the inequities the systemcreates.

13 The fac.r rh" tenants are now liable to pay land tax under amendments to the LandTax Act 191 S passed In 2009 WIll broaden the. base of those adf?Ts'!y affected bythis Bill.

The Bill must not be guillotined through parliament until properly considered. If the A.ctn-eed5 overhauling it should be dO~H~ with public consultation and proper thought. ThisBill nas not had ti,e. benelit of pub-he consultation artd is ill-thought. The dr-:ba ~ must ~adJou::iPO "vhi1st the Issues are properly considered

I thank you for your time, and In anticipation, for your assistance in this e>:lremelyimporta;nt issue.

Should ou v/ish to disc\HS further, pl€a5e do not hesi at~ to contact me on mobile 041394A 101-

I'Re· ard~r\

\ \i~~!\. t

I ;\. I

JOSEPH BARAKATDIRECTOR

fRkl ea fP~ fu (~®t 090 448 052)

ao. gtV~F f]law~g~ g'lMlll ®L.4

SCRUTINY OF

17 FEB 2010

LEGISLATION COMMITfE£

.i\d:'j~f\130~ c;; .3$·1>0· (' ! C{'

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1""::::-::--:------.I 7 febTua '2010

The R~se.arch DirectorSCiUilny uf legislat on Committ€EPtH!iament HouseGeorge StreetBRISBANE Q 4000

Dear Sir/Madam

RE: VALUATION OF lAND AND OTHER LEGISLATION AMENDME"''T BfLL20ro

A-s i\ p rOP1:!rtyin thl:; maller

>n~r. 1 r.ereby objea to the passing of thIs Bill and seek your assl~ance

I detaIl my ohJectioT'l"S follows:-

1. The retr05!~ctivity of th(l legislation is undemocratic. ExiSTing outstanding apPealswill now be assessed und.er new ,"ules which differ from the rules that havegoverned accepted or decld~d objections and appeals.

2. The lac of transparency in the objection and appeal process.

Ob-jeClions must be made blindly ""'lth knowledg:: only of a fi9tJr~ bc!J~V'ed bythe 0 '<'ner to be incorrect. Prior ro this Bill an ownPf whilst In thIs posItion atobjection stage has ,ar more understanding of the logIc behln,j rhat flgUI (' prlofto lodgll1.9 an appeal.

Art grounds of objection must be fully stated and detailed.

Included rn [he documentatIon that must be attached to the obJl~Ctlon isdocumental Ion that CQuld only be used to change the basIs on whICh thevaluation was originally undertaken to th;; proviso method.

T',,: grounos of appeal are limited to those contained in the objection even ofthe I'illue l~ assessed on. an entirely different basis being the provISO n ethod.

The StatE ValuatJOn Sentice, can unilateraliy lapse an objection ·..·.. Hh·:Jl t anyreCOUfse E'Ien if done. vindictively, which IS not uncommon with some In the5\'5. rhe oOJecLlon will remam lapsed We cannot allow SVS to have such pOV"'N

3 The risk to the registration of State Valuation Service Valuers

It 15 Impossible to undertake the initial unimproved valuation by che provisornethod unless an improved valuation i~ undertaken together "vlth a fullvaluation of the improvements

To originally undertake the valuarion uSing rhe proviso method muSt be done\'."tnout documentation and to do value without this informatIon would benegligent.

In Ofd~r to value the prop;;:rty including added improvemen15 such S ',;il.\.le ofleases. vatue of infraSiructufi: credi 5 and Ya~tJe of goodwiil. detajjedinformatlo·n on those components must be kno ~n but i5 not available at firstInstance. to the valuer. To undertake a va~uatlon without that information isnegligent.

Any Valuer who is negligent is subject to d~sciplinary action under the ValuersRegistration Act Including loss of r~glstration.

4. Th~ assault on the Judicial Process is intolerable. The land Appeal Court togetherI.vim the support of the Court of A.ppeal decided the Pa.cific fair case In accordance·an the Ie-gislclion that has existed since 1944 (5Ui)j~et '1"0 the 2008 am ndm!mts).

The Court would be ~xrus~d in asking the questinn as to \vhy they exts-t if.whf'never the law tS Ir'itejpr!:t~d in accordance \!' ii:h how It ah '.ays has been. the1~~15Iauon is changed by the. Government to reflect jts {) nailed p.osition. It wouldbe far eaSier tD J\JS1 change th'" le isliitlon to suit [1Te Governme.I'Tt'S con~e-rHion

rather than go through the costly court procedure. I \";.. are unable tn rely n thecourls 0 apply the la there is. no transpare.ncy in the system and \i.-I,? shotdd notbluff oursel res that there is.

5, The proposed legislation is far wider reaching and inclusive of all of the initiallyproposed amendments that were abandoned as unjust in 2008, The parlIamentagreed they were unjuq then and t/1eY are still unjust.

6. The vnluation $y tern ;s unworkable. The: expertise to complete the valuationsinaccordallCP wi h thIS proposed legn,tation must result in inequities.

SVC val~l=r5 "'0 not have the expertise to assess rO'3d vIII. a faet recfl91ised b"senior members in the Department at a bnefiny of privati: valuers on 15February in the DERM offices

SVS valuers do not ha ,'c the resources to under ake the necessary IndIVIdualassessments that thiS legls/atio/1 demands

svs valuers are unable to calculate Infrastructure charges. EV~11 experiencedTown Planners have difficulry and in some CounCil areas. such as Cold (oasteven the Council will confirm they are unable to undertake such a calculation

3

7 T'h€ legfsi·ation ~vHf skevv valuations of sirniiar !.H.tfCe.fS of land. Take for H1stancenine adjoining parcels of land all with totally similar characteriSTIcs, All nifH? rfassesseti in accordance \'Vtth the pr~~posed iegisiarton \viil no\-~ have quite differen1unimproved values



Vacant Land with development approval a.nd an agreement to lease in place.

A partially bUilt building without an agreement for lease in place.


• A fully completed bUilding without a tenant in place.

Thatl'uHy cOif1ple-d buHding with a lp-naIh in place and

That fully completed building with it tenant in place wh':>re that tenant addssignificant cov~nant to the '1a!u,= of rhe Improved propert'f_

That same property wHl ke~p changing vallll:" according to the t-erm remainingon the lea"S£'.

g TI1€ cc·nce p of sug >~ilng tnCLt the value of in; prove.ments C3JUlm be more than thedepreciated value in the books of {l'CCOUnt, IT any_ This com:r:p! _u,th~ rt'i!'we- t:r..N_.'from marl:et ....alue, Hool s of ACCOl)rlt are used for taxdtion purpo~"~ and notmarket \'ct!ue, Spencer's case has b"'D.j1 he fundame.ntal o.asis of l/(,luation for thelast century. Th? proposed amendmems would serve to ab;:tnd-o-n Spencer's Case byintrLidllcin9 a ontrlved and artifiCial concept of value of jmprOV~1nelit5_

9. The artificiality of this concept could be demonstrated by having regard to itheritage properly for instance. The improvements an a heritage property, by theirvery nature would have already been writttll1 off but, certainly have a market value.Surely Parliament does not intencl that a heritage property be assessed on itsimproved value and this made retrospective. Consider the fact that the added valueof the leases are no longer regarded as improvements and th~refore there isarguably no difference between the market value of the property and theIJnimpro i:d value

1(1 Whil~i the abo',,: matters relate to a small number of the many faihH~s lJ1 terms ofpracticality and the ramifications of this mH there are stil! many other absurdmes

TaxlJlg Entre- re'lP-urial Profit

Tax<I1g Devt:'lop-m",n\ Profit

Taxing Good ,lll

Jh~ adrrH~I;TtOn that leases and 90odv,nH are imOfove.ment5 I,DERri"i Broch i reemltled <The Va1tiation of Land and Other Leglslauon Amendment Brll tG 1on)

and clawllng these Improvements ha'.;:> always been deemed to be part of th'?unimproved value

I i \oVhtlst thIS Bill may appear as though It WIll achieve an Irnrnedlate finanCIal solutionit 'Nill not. It will follow the fate of the 2003 amendments 'NIlICh were alsoumvorkabie and Will be deemed never to have been made.

4

12. The deceptIOn of the Bill wiil serve to mak~ Queensland a risky place to invest. Ifthe Government was up front it would adjust taxation rates which, whilstunpalatable. at least has some honesty and transparency. Those !oolong to furtherInvest in Queensland will rook hard at this deception and the mequities the systemcreates.

13. The fact that tenants are now liable to pay land tax under amendments to the LandTax Act 1915 passed in 2009 will broaden the base of those adversely affected bythis Bill.

The 8il1 must Ti " b€! guillorined through parliament until properly considert>O. If the Actneeds o\'erhauling it should be done with public consultation and properthought. ThisBill has not had the benefit of public consultation and is III-rnough The debate must beadjourned whilst the Issues are properly considered.

j thank you for your time. and in anticipation. for yotJ r asSl5 :trice in this extremelyImportanr issue.

Should you wish to discuss further, please do not hesitate to contact me on mobile0400730730.

From: Michael Slater [[email protected]]Sent: Wednesday, 17 February 20105:03 PMTo: Scrutiny ofLegislation CommitteeSubject: Valuation of Land and Other Legislation AmendmentDear Committee Members

SCRUrlNYOF

i17 FEB 2010

IrON COMMITTEE

With respect to the above Bill, the reasons advanced by the Minister for the amendmentsare factually seriously in error. The fact that this bill has been introduced with nodiscussion with the valuation profession, indeed with knowledge of the proposal withheldfrom all other than the departmental proponents, is alarming.

If the Act is amended in this way the consequences would be widespread and dramatic.

It appears that the department has been advising the Minister that the amendments willrestore long standing principles and methodologies which were disturbed by the results ofthe appeal process. This is clearly and demonstrably wrong. There has been also wildexaggeration of the fmancial implications of not proceeding with the amendments.

I urge the committee that the Minister be advised to delay passage of the bill so that thelight of day can expose the gross deficiencies in this Bill and importantly so that theMinister can obtain informed advice from other than officials who have lost face as aconsequence of the appeal outcome and avoid further misleading the parliament.

Yours faithfully

Michael Slater FAPIValuer

Level 6 Santos House60 Edward StreetBRISBANE

073003 1442

Level 9, 400 George Street, Brisbane Queensland 4000P 07 3330 5836F 07 3330 5875.E [email protected]


17 February 2010

SCRUTINY OF

.1; 7FEB 2010

LEGISLATION COMMITTEE

Re: Valuation of Land and Other Legislation Amendment Bill 2010.

I write in my capacity as the Chair of the Queensland Heritage Council and with the authorityof Council to so do.

In the short time available to consider the amendments the Bill will make to the Valuation ofLand Act Council has formed the view that, if enacted, the Bill will have significant negativeimpacts own owners and occupiers of places on the Queensland Heritage Register and otherplaces of heritage significance in Queensland.

For a number of years Council has been engaging with the State government through the StateValuation Service (SVS) to correct legislative concerns and policy inconsistencies impactingthe valuation of State heritage places. By and large these actions have reached a point whereCouncil is satisfied that the owners of places on the Heritage Register will not bedisadvantaged by valuation law and practice.

Unfortunately the Bill as currently drafted seems to not only undo this work but reinstatepotential inequities in the assessment of unimproved value on these places and overturnsome very significant legal precedents.

In particular the proposal that the value of improvements cannot be more than thedepreciated value in the books of account, if any, will have major impacts on the viability andfeasibility of heritage places.

The improvements on a heritage property, by their very nature would in most cases have longbeen written off from an accounting perspective. They would never the less certainly still havea market value. Surely Parliament does not intend that a heritage property be assessed on itsimproved value and this made retrospective?

Further the proposal in the Bill that the added value of leases of heritage places are no longerregarded as improvements exacerbates the issue. Arguably the application of this approachwould see no appreciable difference between the market value of the property and thestatutory unimproved value for many heritage properties.

The fact that tenants are now liable to pay land tax under amendments to the Land Tax Act1915 passed in 2009 will broaden the base of those adversely affected by this Bill and furthererode the future of this State's built heritage.

Level g, 400 George Street, Brisbane Queensland 4000P 07 3330 5836F 0733305875.E [email protected]

Council contends that the adoption of this Bill in its current form would not only have asignificant impact on heritage places but would contradict other government objects, grantsprograms, policy and strategies for heritage places in this State.

I and Council's members would be more that happy to expand on these issues if a reasonableconsultation period was available to do so.

We urge further careful and informed consideration of the Bill and extension of theconsultation period to allow matters raised by Council to be considered.

Regards

David EadesChairQueensland Heritage Council

From: Andrew Luckhurst-Smith [[email protected]]Sent: Wednesday, 17 Febmary 2010 2:33 PMTo: Scmtiny of Legislation CommitteeCc: [email protected]: Valuation of Land and Other Legislation Amendment Bill 2010The Research DirectorScrutiny of Legislation Committee

ABOUT ANGAS SECURITIES (nANGAsn)

SCRUTINY OF

17 FEB 2010

tEGISLATION COMMITrEE

Angas was established in 2000 as a property financier & investor. Current Balance Sheet assets exceed $150Mraised from the public. To date, most funds are sourced in SA with OLD investors representing only 1% to 2% offunds raised. Yet OLD has received a disproportionate benefit from the investment activities of Angas. Totalcommercial loans of $17M have been advanced to borrowers secured over property in OLD being 15% of thetotal loan book. In addition, Angas Commercial Property Trust has acquired two substantial properties at AcaciaRidge (bought for $6M in 2005) & Morningside (bought for $8.5M in 2007). In 2008, Angas opened an office onthe Gold Coast at Southport pursuant to a program of steady growth of the business. Plans are afoot to relocatethe Angas office to larger premises & increase staff numbers to expand the Angas operation in OLD.

PROPOSED LEGISLATION

I learnt about the proposed legislation from a report in the national press. Angas has deep concerns about itspotential for drastic negative impacts upon existing investments and the potential to advance further capital intothe OLD property market. Banks have tightened their commercial property lending. Economic conditions &contracting capital markets have severely restricted the activities of non bank financiers. There is greatcompetition for funds which Angas has raised for investment. Steep Land Tax imposts as contemplated by thisBill will make it very difficult for Angas to look as favourably upon proposals emanating from OLD. Mysubmission is simple - the competitive disadvantage that this Bill will impose upon OLD will be severe. It is hardto raise capital. It has taken Angas 10 years to raise the fund now to hand. The destination of that capital is fluid& mobile. Local taxing regimes have a real impact on the destination of capital investments.

Regards,

Andrew Luckhurst-SmithExecutive ChairmanAngas Securities LimitedAFS License No. 232479E-mail: [email protected]: (08) 84104343Facsimile: (08) 8410 4355

ADELAIDEAngas Securities LimitedLevel 14Angas Securities House26 Flinders Street ADELAIDE SA 5000GPO Box 294B ADELAIDE SA 5001www.angassecurities.com

OFFICES:

SOUTHPORT [61 7] 5539 7813

MELBOURNE [61 3] 9B63 B460

PERTH [61 B] 93BO 49B3

Disclaimer: The information in this emai! and any attachments is confidential, may be legally privileged and is intended for the addressee only. Reading. copying,disclosure or use by any other person is not authorised. The contents do not represent the opinions of Angas Securities Limited or its related entities except tothe extent that they relate to their official business. If you are not the intended recipient. please delete this message and any attachments and advise the senderby return emai!.This email has been swept for computer viruses but no responsibility is accepted for damage caused by viruses that may be contained within it.

17 February 2010

The Research DirectorScrutiny of Legislation CommitteeParliament HouseBrisbane

Dear Sir,

SCRUTINY OF

.17 FEB 2010

LEGISLATION COMMITTEE~-,. ,0

Re Valuation of Land and Other Legislation Amendment Bill 2010

We hereby register our extreme concern and, indeed, outrage regarding the above Billwhich we believe is to be debated in Parliament early next week.

Having read the Second Reading Speech by the Hon. Stephen Robertson MP, we aredumbstruck by the complete lack of factual basis in his proposal and his twisting of thefacts to make it appear that the "ordinary ratepayer" will be grossly disadvantaged if thisamendment is not passed. More alarming still, as citizens of a supposedly democraticsociety, is the government's attempt to override the Judiciary - this is wholly andunequivocally undemocratic and unacceptable to every Queenslander, no matter whatposition they may have in society. Having a strong judicial system in place, we have nothad to worry in the past about sovereign risk, however it now seems that Queensland is avery risky place indeed for investors.

From our viewpoint as owners of commercial properties, including a heritage property,this amendment is so grossly unjust and unworkable it defies logic. It has obviously notbeen thought through by the persons who formulated it, as it would result in an absolutenightmare for the valuers, who will be placing themselves in a very precarious situationethically. Under the proposed valuation method which includes, among other things, thevalue of the leases, the value of the property would change each time a lease is enteredinto, tenninated or changed. How can that possibly be managed?

When Mr Roberston speaks of "discounts", this is utter nonsense, as it is on the basis ofgrossly over-inflated valuation increases in the 2007 valuation. That valuation valued ourheritage property at more than the market value at the time - an increase of 120% fromthe previous year and 360% on the 2006 value. How can the unimproved value of aproperty exceed its market value? We objected to that valuation at the time and for the

past two years have been in limbo in an objection and appeal process. The recent Courtof Appeal's upholding of the Land Appeal Court's decision on Pacific Fair and othersgave owners some hope to rectify the money-grabbing madness of this government, onlyto find now that the government proposes to make the law retrospective and amended insuch a way as to annihilate any hope of an equitable and fair process of objection orappeal.

Let us stress that we are not asking for favourable treatment, we only wish - indeeddemand - that commercial property owners be treated fairly and reasonably, which at themoment is most definitely not the case. Commercial landowners are being squarelypenalized for investing in this State and it would be a sad outlook for future investment potential investors will turn away in droves and further harm Queensland's economy.Who in their right mind would put their business and therefore their livelihood at themercy of state laws which are so unjust.

Despite all levels of government singing the praises of Brisbane, how livable, how greatit all is, the fact is that they are killing Brisbane's CBD. Proposed access restrictions andheavy penalties for owning CBD property, especially heritage sites, Brisbane is fastbecome unviable and uncompetitive. We have already lost our competitive advantageand things are looking bleaker still. State legislation now allows owners to pass on landtax cost to tenants, however this only applies to new leases and there is a limit to howmuch the tenants are prepared to pay - contrary to the government's apparent belief, thepockets of most business are not bottomless and they will simply go out of business ormove elsewhere.

We ask that this Bill not be passed by Parliament in its current unworkable form, butadjourned so that proper consideration and public consultation can be carried out. Welook forward to your strong support in this matter.

Yours sincerely,

Lisa Ferro

cc. Mr Scott Emerson MP, State Member for Indooroopilly

I<ADORGROUP

Our Ref: G2.02E-mail: [email protected]

17 February 2010

SCRUTINY Of

.19 Fm ~iln

LEGit I ION COMMnnra


Email: [email protected] ,al/z.IIC

Dear Sir/Madam,

Valuation of Land and Other Legislation Amendment Bill 2010

This company owns substantial real estate in Queensland, Victoria, New South Wales andthe ACT. I am writing to express our concerns about the Valuation of Land and OtherLegislation Amendment Bill 2010, which was presented to the Queensland Parliament on 11February 2010.

We believe the changes contemplated in the Bill are manifestly unfair, and therefore it shouldnot be passed in its current form.

Amongst other things, we are particularly concerned about the radical change in valuationprinciples set out in the Bill and the retrospective nature of the legislation.

In the view of these concerns we urge you to, at the very least, delay the introduction of thisBill to allow sufficient time for industry consultation so that all the issues can be properlyhighlighted, discussed and resolved.

This legislation in the form currently proposed will have a considerable impact on the viabilityof Queensland as an investment location.

Yours faithfully,KADOR GROUP PTY LTO

C.J. PARKERMANAGING DIRECTOR

Level 7 500 Collins Street Melbourne VIC 3000 AustraliaT 0386241555 F 0386241550 W www.kadorgroup.com.au

KADOR GROUP HOLDINGS PTY LTD ABN 79 006 443 643100% climate neutral business

2010 Corporate Partners

•BovisLend Lease

18 February 2010

Julie CopleyResearch DirectorScrutiny of Legislation CommitteeParliament HouseGeorge StreetBRISBANE QLD 4000

QUEENSLAND DivisLevel 3, 232 Adelaide Street, BRISBANE OLD 4

GPO Box 113, Brisbane OLD 4r--------_ T 07 3225 3000 F 07 3229 S

SCRUr1NV Of www.propertyoz.con

.1 9FEB 2010

. LEGISLATION COMMITT££~

via e-mail: [email protected]

11,"-I ••

I_: ... ... -

~~"SPRINGFIELD

lAND COJlroRATION

TtiNC

11WALTON'

11111111111111WRIGHT PROPERTY'

Dear Madam

Valuation of Land and Other Legislation Amendment Bill 2010

The Property Council of Australia wishes to communicate its serious concern regarding theValuation of Land and Other Legislation Amendment Bill (Bill) introduced into Parliament lastThursday, 11 February 2010.

The Property Council considers that the Bill infringes fundamental legislative principlesidentified in the Legislative Standards Act 1992 in that it does not have sufficient regard to therights and liberties of individuals.

Retrospectivity of Amendments

The Explanatory Notes to the Bill acknowledge that the Bill is inconsistent with fundamentallegislative principles in that it proposes to retrospectively affect rights in an adverse manner(see proposed section 105).

The substantive amendments will retrospectively apply to valuations in effect on and from 30June 2002, including those presently the subject of unresolved objections or appeals. This willgive rise to inequities between the rights of landowners who have settled objections and appealproceedings and the rights of those landowners whose objections and appeals remain pending.

To require landowners, already put to the considerable expense of court proceedings, to incurthe further costs necessarily associated with revaluating their prospects having regard to afundamentally different valuation regime, is highly objectionable and contrary to the principlesof natural justice.

The Explanatory Notes to the Bill seek to justify retrospectivity on the basis that it is necessaryto address potential inefficiency in the Department. This, with respect, is not sufficientjustification for the significant adverse impact retrospectivity will have on the rights and libertiesof landowners.

The Explanatory Notes identify that the Bill is a direct response to the Court of Appeal'sjudgment in Chief Executive, Department of Natural Resources and Mines v Kent Street Ply Lld[2009] QCA 399, which concerned the unimproved valuation of the Pacific Fair ShoppingCentre. The Queensland Government's position appears to be that the Bill will overturn theCourt of Appeal's decision and confirm the Department's historical valuation approach.

2010 Corporate Partners

•lovisLend Lease

•

••••. ... .

- ~'-SPRINGFIELD

lAND CORPORATION

11WALTON'

11111111111111WRIGHT PROPERTY-

QUEENSLAND DivisLevel 3, 232 Adelaide Street, BRISBANE OLD ~

GPO Box 113, Brisbane OLD 4T 07 3225 3000 F 07 3229 £

www.propertyoz.con

This is clearly not the case. The Bill proposes amendments outside the scope of disputedissues in those proceedings, and proposes radical amendments to valuation practice. Forexample, the Bill proposes an amendment to the methodology used to value land using the"deduction approach" (encapsulated in section 3(2) of the VLA) whereby deductions are madeby reference to the "depreciated value" of improvements as opposed to the "replacement value"of improvements.

Historical valuation practice in applying the "deduction approach" has been that it is the addedvalue of improvements which is deducted from the improved value. The proposed legislationstarts with market value rather than improved value then deducts the lesser of either the cost orthe depreciated value in the owners taxation records albeit with a slight adjustment for holdingcosts.

Objection and Appeal Process

The proposed objection process in the Bill is burdensome, overly prescriptive, and unfairlyconstricts landowner's appeal rights in a manner inconsistent with the principles of naturaljustice.

An effect of the Bill will be that a right of appeal in relation to a decision by the Chief Executiveon an objection will be contingent on a "properly made objection" having been made. It isrespectfully submitted that in the majority of cases, the requirements for a "properly madeobjection" will be unachievable within the statutory timeframe and will involve considerableexpense to a landowner.

Further, the proposal to confine appeal rights to those issues identified in an objection, and topreclude landowners from commencing an appeal where their objection is not "properly made"disproportionately restricts rights, and does not reflect the manifest imbalance of powerbetween landowners and the State, inherent in the valuation process.

ConclusionThe Bill infringes fundamental legislative principles and should be heavily revised. TheProperty Council of Australia strongly urges for the debate on this Bill in Parliament to bedeferred, so appropriate and much-needed industry consultation can occur.

Law Society House, 179 Ann Street, Brisbane Old 4000, AustraliaGPO Box 1785, Brisbane Old 4001

Tel +61 738425943 Fax +61 73221 [email protected]

ABN 33 423 389 441

Office of the Chief Executive

Your Ref: Scrutiny of Legislation Committee

Quote in reply: Planning and Environment Law Committee:21 00347/17

Ms Julie CopleyThe Research DirectorScrutiny of Legislation CommitteeParliament HouseGeorge StreetBRISBANE QLD 4000

Dear Ms Copley

VALVA nON OF LAND AND OTHER LEGISLATlON AMENDMENT BILL 2010

17 February 2010

SCRUTfNYOF

~f 8 FEB 2010

lEG1SLATInN GOMMfITfE

The Queensland Law Society expresses its concern about aspects of the proposed Valuation ofLandand Other Legislation Amendment Bill 2010 (the Bill) not having sufficient regard to the rights andliberties of individuals.

The Society's concerns relate primarily to three aspects of the legislation, namely:

• the characterisation of 'unimproved value' proposed in clause 5;

• the objections and appeal processes proposed in clauses 26 to 32 and 36 to 42; and

• the retrospective application of certain provisions affects current objections and appeals inclause 105.

Characterisation of 'unimproved value'

The Society expresses concern that the treatment of the term 'unimproved value' in the Bill does nothave sufficient regard to the rights and liberties of individuals on the basis that:

• the administrative power contemplated by the Bill is not sufficiently defined; and

• it is ambiguous and not drafted in a sufficiently clear and precise way.

The Society noted that clause 5(7) of the Bill amends section 3of the Valuation ofLand Act 1944 (theAct), by including a new sub-paragraph (5):

(5) To remove any doubt, it is declared that--

L;~~S~;,~~~il Queensland Law Society is a constituent member of ttle Law Council of Australia

~Oueensland

q,LawSociety VALUATION OF LAND AND OTHER LEGISLATION AMENDMENT BILL 2010 l2

(a) the benefit of a lease, agreement for lease or any other instrument of any typerelating to land, or improvements on land that enhances the value of the land, asunimproved or improved must be included in its unimproved value; and

(c) the term 'unimproved value' defined under this section has been given aspecialmeaning that must be applied whether or not that definition accords with the ordinarymeaning of that term.'.

Additionally the Explanatory Notes to the Bill states at page 2:

The policy intent in Queensland has been to value the land component at that amount whichrepresents the value of the land as developed at the date of valuation. In undertaking thatprocess the expression "unimproved value" has been adopted. This was not intended to conveythat the land be valued as though it had not been developed and accordingly should beassessed only by comparison with sales of vacant or unimproved land.

Rather, the expression was a term with a special definition designed to describe the valueof the land component to be attributed to improved property. As unimproved value is ahighly technical concept, litigation as to what precisely was intended has proliferated. (emphasisadded)

The Bill proposes that the expression 'unimproved value' is to be determined with close regard to anumber of factors closely associated and intimately linked to the developed and improved land, namely:

• the benefit of commercial or retail shop leases located within a structure built upon the land; and

• improvements built upon the land which enhance its value.

It is clear from this construction that the term 'unimproved value' is defined to reflect significantcomponents of the improved value of a parcel of land. This reading is supported by the wording of theExplanatory Notes reproduced above and the proposed introduction of a new section 3(5)(c) of the Act.

It is the submission of the QLS that use of the term 'unimproved value' is not sufficiently defined, isambiguous and not drafted in a sufficiently clear way to give a lay reader of the Bill a fair understandingof the Government's policy intent. It is inappropriate and misleading for a term in legislation to besubstantially redefined to mean the opposite of its ordinary meaning.

It is the proposal of the QLS that if it is the policy of Government to assess the value of land with respectto benefits flowing from structures, buildings, improvements and fixtures, this crucial definition should bereplaced by a more appropriate term such as 'developed value' of the land, or similar.

Objections and Appeal Processes

The Society expresses concern that the objection and appeal processes in the Bill do not have sufficientregard to the rights and liberties of individuals on the basis that:

• rights and liberties are dependent on administrative power which is not subject to appropriatereview; and

0:IMR_SSIWORDIDOCGENI26IDOC000051184118_AIZ.DOC

_: i'-C Queensland

\1'LawSociety VALUATION OF LAND AND OTHER LEGISLATION A.MENDMENT BILL 2010 12

• they are not consistent with principles of natural justice.

The Bill sets out new objection and consequent appeal processes for the defined terms generalvaluations and valuations in essentially mirroring processes set out in clauses 26 to 32 and 36 to 42.

The proposed initiation of the objections process set out in clauses 26 and 37 of the Bill requires that anowner object within 45 days of the date of issue of a notice of general valuation or valuation decision tothe Chief Executive and is 'properly made'.

The Bill proposes extensive materials which must comprise a 'properly made' application in proposednew sections 42A and 52AA to the Act. It is noted that an objector is expected to compile evidence,including expert opinion evidence, within 45 of the issue (not receipt) of a notice from the ChiefExecutive. It is the understanding of the QLS that obtaining such evidence within the stated period mayprove difficult in most cases.

Once received the Chief Executive must assess an objection to determine whether it is properly madepursuant to proposed new sections 42C and 52AB of the Act. No time period is provided for thisconsideration, but should the Chief Executive determine that an objection is deficient the Chief Executivemust issue a 'correction notice' to the objector. The 'correction notice' must state Why an objection is not'properly made' and provides an objector 14 days from the date of issue (not receipt) for the objector toamend the objection so that it is a properly made objection. Obtaining expert evidence within this 14 dayperiod to 'correct' an objection would most likely prove to be an impossible task.

Should an objector not 'correct' their objection within the 14 day period, serious consequences flow:

• pursuant to proposed sections 42C(3) and (4) and 52AB(3) and (4) of the Act, an objection isdeemed to be not 'properly made'; and

• pursuant to proposed sections 43(2) and 53(2) of the Act the Chief Executive will be preventedfrom deciding the objection with respect to a general valuation; and

• pursuant to proposed sections 45(2)(c) and 55(2)(c) of the Act the objector will be preventedfrom taking the matter to the Land Court.

Proposed sections 42C and 52AB of the Act do not appropriately provide appropriate review ofadministrative power and do not accord natural justice to an objector as:

• a decision of the Chief Executive that an objection is not 'corrected' within the required timeperiod can not be appealed to any forum; and

• there is no obligation on the Chief Executive to make a decision that supplementary materialprovided during the 14 day period has made the objection 'properly made' within the 14 dayperiod; and

• there is no discretion or mechanism for a period of greater than 14 days from the date of issue(not receipt) of a 'correction notice' to be provided to an objector to 'correct' their objection andexpiry of that period will deem the objection not 'properly made'.

O:\MR_SS\WORDlDOGGEN\26\DOG00005\184118_AIZ.DOG

~,,'~ Queenslandq,LawSociety VALUATION OF LAND AND OTHER LEGISLATION AMENDMENT BILL 2010 li

It is noted that the Bill also proposes amendments to the Land Court Act 2000, which would preclude theCourt's jurisdiction from making declarations that an objection to a valuation or general valuation is'properly made', Such a fettering of discretion of the Court is a concerning and potentially inconsistentwith inherent court jurisdiction.

Retrospective Application and Effect on Current Objections and Appeals

The Society expresses concern that the retrospective application of certain provisions affecting currentobjections and appeals in the Bill does not have sufficient regard to the rights and liberties of individualson the basis that:

• it is inconsistent with the principles of natural justice; and

• it does adversely affect rights and liberties retrospectively,

It is proposed that the new section 105 in the Act provides, relevantly:

(1) This section applies to a valuation in effect at any time on or from 30 June 2002.(2) Former sections 3 to 6 and 23 do not apply, and are taken never to have applied, for the

valuation.(3) New sections 3 to 6 and 23 apply, and are taken to have always to have applied, for the valuation.(4) Despite subsections (2) and (3), former sections 3 to 6 and 23 continue to apply for the purpose of

a proceeding decided before the commencement.(5) To remove any doubt, it is declared that subsections (2) and (3) otherwise apply for all other

purposes, including, for example-(a) an objection or decision relating to the valuation made before the commencement; and(b) a proceeding, including an appeal from a proceeding mentioned in subsection (4), started but

not decided before the commencement.

The proposed application of these provisions is clearly retrospective in intent by replacing the crucialdefinitions contained in sections 3 to 6 of the Act for any valuation issued from 1 July 2002 onwards,Objections and Appeals based on the appropriate determination of concepts such as 'unimproved value'already commenced but not finalised will be subject to the new provisions, It is highly irregular for the lawto be retrospectively amended for proceedings on foot and doing so brings with it the real danger forparties to objections or appeals that costs incurred up to this point will be wasted.

Additionally it is contrary to principles of natural justice for a party not to be heard on the principles of lawwhich applied to their matter when their action was taken, Retrospectively supplementing new definitionsinto the objection and appeal processes associated with valuations is a denial of procedural fairness,

It is the submission of the Society that parties to existing objections and appeals will be adverselyaffected in both a financial and procedural sense by the retrospective application of the legislation. Theproposed provisions contained in the new section 105 of the Act are, in our view, needlessly contrary tofundamental legislative principles and unnecessarily interfere with the rights of parties to existinglitigation.

It is not the position of the Society to comment, nor is the Committee the appropriate forum for commenton the economic implications of these proposals,

O\MR_SS\WORDlDOCGEN\26\DOC00005\184118_AIZ.DOC

'::'r\' QueenslandQ,LawSociety VALUATION OF LAND AND OTHER LEGISLATION AMENDMENT BILL 201 0I~

Thank you for providing the Queensland Law Society with the opportunity to comment on these issues.

Yours faithfully

Peter EardleyPresident

O:\MR_SS\WORDlDOCGEN\26\DOC00005\184118_AIZDOC

17'h February 2010

Julie CopleyThe Research DirectorScrutiny of Legislation CommitteeParliament HouseGeorge StreetBRISBANE QLD 4000

Dear Mrs Copley,

SCRUrl'N'VOlf

.1. 0 i.'1:iiorn ''j)1;I.If.ID.~. ;UJ rlCiJJ) ~,l.lUu'

LEGISLATION COMMI1flJlBEE S

PROPERTIES

ACN 010 754 873

ABN 73010 754 873

Level 36, Santos Place32 Turbot StreetBrisbane Old 4000

PO Box 12411 George StBrisbane Old 4003

T 073221 7100F 073221 0611www.nielsonproperties.com.au

RE: PROPOSED QUEENSLAND VALUATION OF LAND AND OTHER LEGISLATIONAMENDMENT BILL 2010

As a Queensland based commercial property developer and property manager, we write toexpress our grave concerns regarding the proposals set our in the above Bill as we believe theproposed amendments will not only adversely affect commercial property owners and theirtenants but will also present Queensland as a state were certainty and market principle havebeen abandoned.

In summary it would appear that the Act seeks to redefine the accepted and approved definitionof the "unimproved value of Land" by allowing a number of variables notional improvements tobe considered in assessments

In particular but not exclusively we would draw you attention to the following areas of concern;

1. The retrospectively of the legislation is undemocratic. Existing outstanding appeals willnow be assessed under new rules which differ from the rules that have governed acceptedor decided objections and appeals.


Objections must be made blindly with knowledge only of a figure believed by the ownerto be incorrect. Prior to this Bill an owner whilst in this position at objection stage hasfar more understanding of the logic behind that figure prior to lodging an appeal.


Included in the documentation that must be attached to the objection is documentationthat could only be used to change the basis on which the valuation was originallyundertaken to the proviso method.

The grounds of appeal are limited to those contained in the objection even if the valueis assessed on an entirely different basis being the proviso method.

The State Valuation Service, can unilaterally lapse an objection without any recourse.Even if done vindictively, which is not uncommon with some in the SVS, the objectionwill remain lapsed. We cannot allow SVS to have such power.


It is impossible to undertake the initial unimproved valuation by the proviso methodunless an improved valuation is undertaken together with a full valuation of theimprovements.

To originally undertake the valuation using the proviso method must be done withoutdocumentation and to do value without this information would be negligent.

In order to value the property including added improvements such as value of leases,value of infrastructure credits and value of goodwill, detailed information on thosecomponents must be known but is not available at first instance to the valuer. Toundertake a valuation without that information is negligent.

Any valuer who is negligent is subject to disciplinary action under the ValuersRegistration Act including loss of registration.

4. The assault on the Judicial Process is intolerable. The Land Appeal Court together withthe support of the Court of Appeal decided the Pacific Fair case in accordance with thelegislation that has existed since 1944 (subject to the 2008 amendments). The Courtwould be excused in asking the question as to why they exist if, whenever the law isinterpreted in accordance with how it always has been, the legislation is changed by thegovernment to reflect its own failed position. It would be far easier to just change thelegislation to suit the government's contention rather than go through the costly courtprocedure. If we are unable to rely on the courts to apply the law there is no transparencyin the system and we should not bluff ourselves that there is.

5. The proposed legislation is far wider reaching and inclusive of all of the initiallyproposed amendments that were abandoned as unjust in 2008. The parliament agreedthey were unjust then and they are still unjust.

6. The valuation system is unworkable. The expertise to complete the valuations inaccordance with this proposed legislation must result in inequities.


SVS valuers do not have the resources to undertake the necessary individualassessments that this legislation demands.

SVS valuers are unable to calculate infrastructure charges. Even experienced TownPlanners have difficulty and in some Council areas such as Gold Coast even theCouncil will confirm they are unable to undertake such a calculation.

7. The legislation will skew valuations of similar parcels of land. Take for instance nineadjoining parcels of land all with totally similar characteristics. All nine, if assessed inaccordance with the proposed legislation will now have quite different unimproved values.



Vacant Land with development approval and an agreement to lease in place.

A partially built building without an agreement for lease in place.

That same bUilding with an agreement for lease in place.


That fUlly completed building with a tenant in place and

That fully completed bUilding with a tenant in place where that tenant adds significantcovenant to the value of the improved property.

That same property will keep changing value according to the term remaining on thelease.

8. The concept of suggesting that the value of improvements cannot be more than thedepreciated value in the books of account, if any. This concept further moves away frommarket value. Books of Account are used for taxation purposes and not market value.Spencer's case has been the fundamental basis of valuation for the last century. Theproposed amendments would serve to abandon Spencer's Case by introducing a contrivedand artificial concept of value of improvements.

9. The artificiality of this concept could be demonstrated by having regard to a heritageproperty for instance. The improvements on a heritage property, by their very nature wouldhave already been written off but, certainly have a market value. Surely Parliament doesnot intend that a heritage property be assessed on its improved value and this maderetrospective. Consider the fact that the added value of the leases are no longer regardedas improvements and therefore there is arguably no difference between the market valueof the property and the unimproved value.

10. Whilst the above matters relate to a small number of the many failures in terms ofpracticality and the ramifications of this Bm there are still many ()ther absurdities:

Taxing Entrepreneurial Profit

Taxing Development Profit

Taxing Goodwill

The admission that leases and goodwill are improvements (DERM Brochure entitledUthe Valuation of Land and Other Legislation Amendment Bill 2010 10

) and claimingthese improvements have always been deemed to be part of the unimproved value.

11. Whilst this Bill may appear as though it will achieve an immediate financial solution itwill not. It will follow the fate of the 2003 amendments which were also unworkable and willbe deemed never to have been made.

12. The deception of the Bill will serve to make Queensland a risky place to invest. If theGovernment was up front it would adjust taxation rates which, whilst unpalatable, at leasthas some honesty and transparency. Those looking to further invest in Queensland willlook hard at this deception and the inequities the system creates.


14. The Bill must not be gUillotined through parliament until properly considered. If the Actneeds overhauling it should be done with public consultation and proper thought. This Billhas not had the benefit of public consultation and is ill-thought. The debate mustadjourned whilst the issues are properly considered.

We would be grateful for you support in resisting this bill on the ground above.

of.'3

gi-IO-------J=f---~.. ~==:=:=--- ..........=;_-

SCRUTINY OF

if7 FEB 2010


From: Gabe Sciarretta [[email protected]]

Sent: Wednesday, 17 February 2010 9:04 AM


Subject: Valuation of land and other legislation amendment bill 2010

Tamara Vitale

I wish to register the following objection to the proposed bill:

1. The retrospectivity of the legislation is undemocratic. Existing outstanding appeals will now beassessed under new rules which differ from the rules that have governed accepted or decidedobjections and appeals.


a Objections must be made blindly with knowledge only of a figure believed by the owner to beincorrect. Prior to this Bill an owner whilst in this position at objection stage has far moreunderstanding of the logic behind that figure prior to lodging an appeal.

.. All grounds of objection must be fully stated and detailed.

11 Included in the documentation that must be attached to the objection is documentation thatcould only be used to change the basis on which the valuation was originally undertaken to theproviso method.

a The grounds of appeal are limited to those contained in the objection even if the value isassessed on an entirely different basis being the proviso method.

" The State Valuation Service, can unilaterally lapse an objection without any recourse. Even ifdone vindictively, which is not uncommon with some in the SVS, the objection will remainlapsed. We cannot allow SVS to have such power.


a It is impossible to undertake the initial unimproved valuation by the proviso method unless animproved valuation is undertaken together with a full valuation of the improvements.

11 To originally undertake the valuation using the proviso method must be done withoutdocumentation and to do value without this information would be negligent.

.. In order to value the property including added improvements such as value of leases, value ofinfrastructure credits and value of goodwill, detailed information on those components mustbe known but is not available at first instance to the valuer. To undertake a valuation withoutthat information is negligent.

11 Any Valuer who is negligent is subject to disciplinary action under the Valuers Registration Actincluding loss of registration.

4. The assault on the Judicial Process is intolerable. The Land Appeal Court together with the supportof the Court of Appeal decided the Pacific Fair case in accordance with the legislation that hasexisted since 1944 (subject to the 2008 amendments). The Court would be excused in asking thequestion as to why they exist if, whenever the law is interpreted in accordance with how it alwayshas been, the legislation is changed by the government to reflect its own failed position. It wouldbe far easier to just change the legislation to suit the governments' contention rather than gothrough the costly court procedure. If we are unable to rely on the courts to apply the law there isno transparency in the system and we should not bluff ourselves that there is.

17/0212010

ofA'" 2>

5. The proposed legislation is far wider reaching and inclusive of all of the initially proposed amendmentsthat were abandoned as unjust in 2008. The parliament agreed they were unjust then and they are stillunjust.

6. The valuation system is unworkable. The expertise to complete the valuations in accordance with thisproposed legislation must result in inequities.

.. SVS valuers do not have the expertise to assess goodwill, a fact recognised by senior members in theDepartment at a briefing of private valuers on 15 February in the DERM offices.

.. SVS valuers do not have the resources to undertake the necessary individual assessments that thislegislation demands.

.. SVS valuers are unable to calculate infrastructure charges. Even experienced Town Planners havedifficulty and in some Council areas such as Gold Coast even the Council will confirm they areunable to undertake such a calculation.

7. The legislation will skew valuations of similar parcels of land. Take for instance nine adjoining parcelsof land all with totally similar characteristics. All nine, if assessed in accordance with the proposedlegislation will now have quite different unimproved values.

D Vacant land with no development approval.

11 Vacant land with development approval.

a Vacant Land with development approval and an agreement to lease in place.

" A partially built building without an agreement for lease in place.

D That same building with an agreement for lease in place.

D A fully completed building without a tenant in place.

I! That fully completed building with a tenant in place and

.. That fully completed building with a tenant in place where that tenant adds significant covenant tothe value of the improved property.

a That same property will keep changing value according to the term remaining on the lease.

8. The concept of suggesting that the value of improvements cannot be more than the depreciated valuein the books of account, if any. This concept further moves away from market value. Books of Accountare used for taxation purposes and not market value. Spencer's case has been the fundamental basis ofvaluation for the last century. The proposed amendments would serve to abandon Spencer's Case byintroducing a contrived and artificial concept of value of improvements.

9. The artificiality of this concept could be demonstrated by having regard to a heritage property forinstance. The improvements on a heritage property, by their very nature would have already beenwritten off but, certainly have a market value. Surely Parliament does not intend that a heritageproperty be assessed on its improved value and this made retrospective. Consider the fact that theadded value of the leases are no longer regarded as improvements and therefore there is arguably nodifference between the market value of the property and the unimproved value.

10. Whilst the above matters relate to a small number of the many failures in terms of practicality and theramifications of this Bill there are still many other absurdities:

• Taxing Entrepreneurial Profit

.. Taxing Development Profit

• Taxing Goodwill

17/02/2010

of.#3

D The admission that leases and goodwill are improvements (DERM Brochure entitled lithe Valuation ofLand and Other Legislation Amendment Bill 201011

) and claiming these improvements have alwaysbeen deemed to be part of the unimproved value.

11. Whilst this Bill may appear as though it will achieve an immediate financial solution it will not. It willfollow the fate ofthe 2003 amendments which were also unworkable and will be deemed never to havebeen made.

12. The deception of the Bill will serve to make Queensland a risky place to invest. If the Government wasup front it would adjust taxation rates which, whilst unpalatable, at least has some honesty andtransparency. Those looking to further invest in Queensland will look hard at this deception and theinequities the system creates.

13. The fact that tenants are now liable to pay land tax under amendments to the Land Tax Act 1915passed in 2009 will broaden the base of those adversely affected by this Bill.

14. The Bill must not be guillotined through parliament until properly considered. If the Act needsoverhauling it should be done with public consultation and proper thought. This Bill has not had thebenefit of public consultation and is ill-thought. The debate must adjourned whilst the issues areproperly considered.

Regards,

Gabe SciarrettaHungry Jack'sQLD Development ManagerUnit316 Theodore StreetEagle Farm 4009tel. 07-38681646mob. 0419-914917

---------

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17/02/2010

15 February 2010

SCRUTfNYOF

.Hl fEB lJYItffi

LEGISLATION 'COMmIH:Australian Property InsritUle

~\'\O .The MinisterThe Honourable Stephen Robertson MPDepartment of Environment and Resource Management400 George StreetBRISBANE QLD 4000

Dear Minister,

Re: Proposed Amendments Valuation of Land Act 1944.

API - QLD Division

ASh! 49 (X7 505 866

level 2. '3! Le'chhard St:'eet

Spnng HiU QLD '1000

PO Box 106

Spring Hill QLD 4004

Telepnone: (07} 3832 3i 39

Facsimile (07'1 3839 0438

[email protected]'-g.au

WYv\\'.apl.org.au

We refer to the proposed amendments to the Valuation of Land Act 1944 currently before theHouse. We thank your department for a briefing session and background information provided to usand a range of other organisations last Friday.

The Australian Property Institute (API) has a keen interest in these matters, given that our membersacr.oss both the public and private sectors have the responsibility under their professionalregistration and members of the Institute, to fairly and properly apply the legislation.

As recent years attest, these are indeed complex and difficult matters and require closeconsideration, noting particularly that the legislation must provide an equitable base andconsistency for this important area of state and local government taxation.

We appreciate that over the last twelve months the Department has consulted widely across thesector. In retrospect, it is a pity that the government's final proposal were only made known at thefirst reading in speech, though we understand the urgency presented by the imminent release of2010 valuation notices.

We believe the API has and can continue to play a constructive role in any of these matters andassure yOLl of our independence, professionalism and genuine interests in facilitating change.

As regards the specific amendments, we would particularly ask that you keep in mind the followingmatters:

• The structures and methodologies here need to be in conformity with normal principles formass valuation of property. This implies that assessments need to be kept as simple and asuniform 'across the board' as possible;

• (Related to the above), the differentiation, property to property, on a range of parametersas proposed in this legislation may lend itself to a wide variety of interpretations, andpotentially objections and litigation. Additionally, the proposed amendments foreshadowvery strict time frames for the assembly of information, lodgement of objections, etc. Bothmatters may create workload difficulties, both in the public and private sectors, givencurrently available resources.

LE-ADif\IC Ti-<E ?R.0PE!~TY

Pf<Of,SSK)hj

Finally, and perhaps most importantly here, we believe that the amendments proposed againattempt to address current issues and not an underlying systemic problem. The Valuation of LandAct 1944 in Queensland has remained virtually unchanged for seventy years. On the face of it, thatmay be taken as a credit to its fundamental simplicity and robustness. In reality however, the APIbelieve that it now fails to properly address matters and issues (particularly in our contemporaryurban environment), that could not have been contemplated at the time of its inception.

Consequently, we would respectfully ask that you consider embarking on a project which would,over time and with necessary consultation with all key stakeholders, see the Act effectively replacedto meet contemporary needs. We would commit to working closely with all stakeholders to achievethat outcome should this be your decision.

With best regards,

Dr. ike HefferanSenior Vice PresidentQueensland Divisional Council

LEAD,"ICTHE pp.oPER,y

PR,::JFEss,or 4

Gail Easton SCRUTINY OF

'17 FEB 2010


Milton Cockburn [[email protected]]

Wednesday, 17 February 2010 6:18 PM

From:

Sent:


Subject: Submission by Shopping Centre Council of Australia on Valuation of Land and Other LegislationAmendment Bill 2010.

Attention: Research Director, Scrutiny of Legislation Committee, Parliament House, Brisbane

The Shopping Centre Council of Australia represents major owners and managers of shopping centresthroughout Australia, and therefore also represents investors in shopping centres. We would like to makethe following comments on the Valuation of Land and Other Legislation Amendment 8i1l2010. (Pleaseexcuse the fact that this email.is not on our official email format as I am typing this out of the office.)

1. There was no consultation with relevant industries before the Bill was introduced to Parliament.This is inexplicable given the massive ramifications this Bill will have on industries acrossQueensland. The Bill must not be debated until these consultations can take place. We would notethat, since the changes are to the valuation system, they extend right across the spectrum ofindustry in Queensland.

2. The Bill substantially changes the methodology of land valuations in Queensland. The Billproposes that the unimproved value of land will now include (among other things) the developmentpremium or profit in the development process, any goodwill created by the owner's efforts, theadded value of leases and agreements for lease, and the value of any infrastructure charges thathave been paid. (The latter means this will now be a tax on a tax.) Such a monumental change,described by a legal firm in Brisbane (which has not been involved in the recent litigation) as "aradical change to Queensland's rating and land tax system", should not proceed without furtherconsultation with relevant bodies.

3. Another alarming feature of the Bill is that, in determining the value of improvements on the site,the Department will only have to take into account the lesser of the depreciated cost ofconstruction of the improvements or any depreciated value as recorded in the owner's books ofaccounts (not the replacement cost of the improvements.)

4. The changes, if implemented, would mean that mass valuations would no longer be possible inQueensland. The changes require that each parcel of land will need to be valued individually,based on detailed information about the improvements on the land and any business orbusinesses carried on. This will require either a massive increase in departmental resources which is unlikely - or mass valuations will actually still be done. In other words, the requirements ofthe Bill will not be observed by the Department and this will inevitably result in greater inequity.

5. It should be noted that the heads of valuation of Queensland's major private valuation firms havepublicly stated that "the legislation as drafted is unworkable." "As experienced practitioners we failto see how this legislation can be properly implemented without the Government's valuers beingprivy to information which is not available to them. Under such circumstances the propensity forerrors is well beyond that which is acceptable." (Media statement 17/2/10)

6. The changes to the objection processes, far from updating and modernising the process, willsimply make them unworkable for the vast majority of land owners. They will also be inequitable inoperation since it will probably only be the large, professional property owning companies that willbe able to 'jump through the hoops' that will now be created. The new processes also lacktransparency, and ignore rules of natural justice, since they place so much discretion in the handsof the Department of Environment and Resource Management.

7. The justification given for these changes, by the Minister and in the Explanatory Notes, aremisleading. It is not correct, as the Minister says in his 2R speech, that "If the Court's interpretationof the Act in this case were to apply in future, it would result in fundamentally different valuationprinciples being applied to commercial land, as opposed to other land types like residential land."Similarly it is misleading for the Minister to claim (in his media statement) that the Bill wasnecessary to prevent "a recent Court of Appeal decision overturning decades of past practice in thevaluation of commercial property." This has been disproved by the Land Court, the Land AppealCourt (on two occasions) and the Court of Appeal (by a three-nil decision.) These benches containsome of the most eminent jurists in Queensland. The Court of Appeal is the highest court in theState. The Government's claim that the Court of Appeal had overturned decades of past practicecould have been tested in the High Court. One is entitled to assume, since the Government did notappeal, that the legal advice available to it was that the Court of Appeal had not erred in law.

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8. The Court of Appeal did not make new law. It confirmed the existing law. It adopted the principles ofvaluation that had been consistently accepted by the courts and which had consistently been adoptedby the Department's own valuers prior to 2001. What changed in 2001 was not the law, or thetraditional valuation methodology, but the approach of some valuers in the Department who adopted anew and entirely novel valuation methodology, which has now been firmly rejected as wrong bysuccessive courts.

9. The Explanatory Notes claim (page 2) the critical judicial interpretation of the definition of "unimprovedvalue" is the Commissioner of Land Tax V Nathan (1913) (the 'Nathan Case'). If this was actually thecase one would expect that the Department's official guidelines for valuers would reflect this. In factthese guidelines, which are available on the web, in the section on 'Unimproved Value' (Section U),make no reference to the Nathan Case. They do, however, quote extensively from the 'TooheyCase" (Tooheys Ltd V the Valuer General (1925)) which the Explanatory Note now seeks to disparage.

10. There is no doubt that this 'radical change' will increase land valuations and therefore land taxesacross Queensland. Hopgood Ganim Lawyers have noted in an advice to clients that "there willundoubtedly be an increase in land valuations for commercial and industrial properties across theState." The additional land tax which will result from this increase in land tax will be an impost onowners, investors, tenants (either directly or indirectly, through increased rents) and ultimatelyconsumers as the higher costs are passed on. There will also be consequential increases in councilrates which will fall directly on tenants. There will also be a reduction in asset values as a consequenceof the reduced capitalisation of net income resulting from the increased taxes and rates. This willsignificantly impact on those saving for, and living out, their retirement as the investments held in theirsuperannuation funds decline in value.

I1. Major shopping centre owners, who had no warning of this Bill, are now examining the feasibility ofproposed major developments and redevelopments in Queensland. There is no doubt, if this Bill ispassed, that many of these projects will be rendered uneconomic and will not proceed. This will be atthe cost of thousands of potential construction and retailing jobs in Queensland. Undoubtedly thedevelopers of other commercial properties will be undertaking similar exercises.

12. The Government has justified the retrospectivity of this Bill on the grounds that local governments"would be potentially exposed to over $600 million in repayment of Council rates and Queenslandtaxpayers would be exposed to repayment of land tax." There has been no justification for this wildclaim. The Government should be forced to justify how it arrived at such a figure. Our legal advice isthat the maximum exposure of taxpayers - on the assumption that all appeals are decided in favour ofthe appellant - could be no more than $30 million. We doubt that the exposure to local governmentswould be anywhere near the amount of $1 0 million. (Incidentally, those taxpayers who are ultimatelyentitled to refunds would undoubtedly be prepared to do sO on the basis of future land tax or councilrate credits so neither the Government or local councils would be required to repay anything.) If theGovernment's concern is that previously settled valuations may now be unsafe, there are measures bywhich the Government can take to ensure these are put beyond legal challenge and we have advisedhow this can be done. There is no justification for the retrospectivity of this legislation which has nowplaced Queensland high among jurisdictions regarded by international investors as a sovereign risk.Why would any investor purchase a Queensland asset when the asset value can be reducedretrospectively?

13. It is not necessary that this Bill be debated by Parliament in the week beginning 24 February, which weunderstand is the Government's present intention. The 2010 valuations do not have to issue until theend of March. There are also other options the Government can take and have taken in the past.Debate on this Bill must be delayed.

14, We would be happy to elaborate on any aspect of this submission.

Regards, Milton Cockburn, Executive Director, Shopping Centre Council of Australia, 11 Barrack Street,Sydney, 2000 ([email protected]; 0419750299)

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