Reducing UCV valuations

[Barracuda]

Just recieved an updated Notice of Valuation from the NSW Valuer General for the PPOR. The valuation is a decent jump from the previous valuation (from memory, hve to find the last one). Has anybody had any luck in convincing the Valuer General that he might have gone too far? My understanding is that it directly affects the rates charged.

Alternatively, is it detrimental to have the UCV too low when it comes to borrowing against the PPOR or home / contents insurance?

I figure that I have some points to support claim including:

- Although large for the area, our land is irregular and has much unusable land due to the driveway length ~85m x 4.57m (battleaxe).
- We're nestled in the bush and are in Category 1 bush-fire prone area, which both reduces the inherent value of the land and imposes severe restrictions on improvements (even though we're talking un-improved value here).
- Due to driveway access and bushfire prone restrictions we believe that subdividing in the future will not be allowable due to limitations imposed on sharing driveways in category 1 zones (TBC).
- Council regulations requiring maintenance of trees and rocky-outcrops also limits improvements on the land.
- We can show from RPData that the new value is not equivalent to the median growth / decline in the area.
- Using the RPData values and discounts for the above I can suggest a reasonable alternative.

Any tips or tactics used for successfully reducing UCV valuations are appreciated.

 

[Kiwi Investor]

Why do you want to try and have your UCV reduced ?

If it's reduced your equity will in theory also be reduced.

There is normally a flier or letter that comes with your UCV that explains what the UCV is and what the procedure is if you don't agree, thats what we get in Qld so I would assume that NSW is the same ?

It may even go up higher if you lodge an objection, there is always conjecture and discussion around UCV's, but the Govts must have some method of valuing unimproved land, just in case they want to reume 50m2 or so to build a new busway near your ppor or IP.

KI

 

[Barracuda]

The main reason is to keep coucil rates on PPOR down - being PPOR I can't claim them as an expense so why pay more?

Of course, if it affects perceived value of property in the bank's eyes as far as equity goes then it might be different. My understanding though is that the formal UCV valuation has little bearing on the market's perceived value of land / property - I see it as more of an admin issue than a market value issue.

I have called the Valuer General's office and they will be sending a kit out with their valuation data for the area as well as the forms / criteria for revaluation.

 

[MIZBUF]

You sound as if you will be able to present a good case with the info that you have gathered to present to VG . In the same area ,(only closer in and more garden than Bush) some years ago, at a time when VG had the hide to up value of land to more than what the substantial properties with pools and tennis courts were selling for-i.e. LESS than the value the VG placed on land,alone ,I wrote to protest re the land value .I succeeded in having it reduced a bit-- every bit helps when it is your PPoR. I agree with you-- Estate Agents will argue with you that the value placed by VG has no bearing on market prices-- especially if you have been slugged with a high value-- and agents want to get easy sale. Cheers.

 

[Ebbie]

Hi baracuda2,

I did a similar thing last year when the valuation on my vacant block of land came in unrealistically high for the area. I completed the objection paperwork and listed some recent land sales stating the cost per sq.m and why these other blocks were worth more. The UCV valuation was reduced to my estimated figure, resulting in a part land tax refund and lower council rates.

Although many forumites may not agree with this approach it worked for me and helped with cashflow. It had no effect on the valuation I then obtained from my bank panel valuer (for construction finance) which still came in very high. So I'd have to disagree with Kiwi Investor's theory of reduced equity because mine increased at the same time my UCV was lowered.

 

[Ebbie]

I also had the the valuation reduced on a property where the land content came in a bit high, though it wasn't by much:

http://www.somersoft.com/forums/showthread.php?p=134394#post134394

 

[Kiwi Investor]

Ebbie, yes your quite correct, what was I thinking ? Reduced equity from a UCV ?? As most of us are aware a UCV is used as a guide for the 'value of unimproved land' which as you have pointed out is a highly subjective matter, and normally has no relation to a 'market valuation' which normally is an indication of what your property or land or both is worth, normally using the direct comparison method.
Just make sure you don't have a prime block that the Govt might want to resume, then your low UCV might not be an advantage.
Your example sounds an interesting one, you objected to the UCV, had it reduced, then sometime later had a market valuation done, which was higher than the UCV, as you would expect. Am I safe in assuming that the rise in the value of the land helped with construction finance to add some improvements to the unimproved block ?
I recently purchased an IP in Invercargill in NZ, and the funny thing was that the market valuation was lower than the Govt valuation (similar to a UCV), not by much about 2k, just as well I was able to purchase at a good price !!

K

 

[Barracuda]

It's good to know I'm not going to waste my time and that there may at least be a chance that the valuation may be reduced. Thanks for the feedback .

 

[Ebbie]

Your example sounds an interesting one, you objected to the UCV, had it reduced, then sometime later had a market valuation done, which was higher than the UCV, as you would expect. Am I safe in assuming that the rise in the value of the land helped with construction finance to add some improvements to the unimproved block ?
I recently purchased an IP in Invercargill in NZ, and the funny thing was that the market valuation was lower than the Govt valuation (similar to a UCV), not by much about 2k, just as well I was able to purchase at a good price !!

K

Hi Kiwi Investor,

Yes the increased land valuation by the bank panel valuer allowed me to borrow 100% of the cost of construction.

Ebbie.

 

[geoffw]

It's good to know I'm not going to waste my time and that there may at least be a chance that the valuation may be reduced. Thanks for the feedback .

I have actually had a valuation done on the basis of UCV + building cost.

This was for a house which was very atypical of the area.