VCAT Review of Assessment
When industrial land is known to have been filled in an uncontrolled manner over many years and there are concerns that it might contain some contaminated material, to what extent should its value be reduced?
That was the question that confronted a client of Aitken Partners. Its significance was that a reduction in value would reduce the amount of land tax (and rates) payable.
Council’s valuers argued that because the extent of fill and contamination was unknown, the cost of remediation was unknown and therefore only a small (10 – 15%) discount should be allowed. Valuers, retained by Aitken Partners on behalf of the client, argued that because the extent of fill and contamination was unknown, the cost of remediation was unknown and therefore prospective purchasers would not offer nearly as much. They also argued that the costs of investigating the nature and extent of the fill should also be taken into account.
The matter was settled at VCAT with a discount of 20-25% being applied. Land tax savings of up to $147,000 were achieved and it is likely that these savings will be carried forward beyond 2016. It is also likely that client’s municipal rates will be reduced.