The cost of objecting to land valuations in NSW is forcing small businesses to overpay council rates and land tax.

There are widespread concerns that objection costs are spiralling out of control. Hornsby Council, which is appealing the valuation of a disused quarry has spent more than $1m in legal fees and expert reports. If litigation continues costs may escalate to $2.5m.

The Mayor, Steve Russel, has called the valuation system “crazy”, saying that “cost of appealing valuations is ridiculous. Families and small businesses are being completed locked out of the process.”

High profile Commercial Property Owner and Developer Mr Lesli Berger, General Manager of Fivex Commercial Property is also currently fighting in the courts.

“The land valuation system in NSW was introduced in 1916. Today it’s too inflexible and lacks transparency. The appeal mechanisms are complex, cumbersome and expensive, making an appeal like mine a very fraught ordeal,” Mr Berger said.

“Business owners are often too busy and don’t always have the skills or resources to take on big government,” Mr Berger said when commenting on his Land and Environment Court appeal against excessive land valuations and land tax bills.

Mr Berger speaking from experience noted many landlords and property investors don’t dispute incorrect Land Valuations because of the complexity and cost associated with the appeals process and as a matter of practicality choose to simply pass the land tax bill onto to their tenants.

Fivex is disputing land valuations made on their commercial properties in New South Head Road Double Bay which Mr Berger argues are up to 100% too high and if applied across Double Bay and the State is costing landlords and tenants tens of millions of dollars.

“The Land Tax issue is not only about Double Bay but has implications across NSW. It affects small businesses and impacts upon the NSW economy,” Mr Berger said.

“It is clear that the Valuer General has ignored his duty under the Act to ensure a fair and transparent land valuation system and instead has ‘stacked the deck’ to ensure land tax receipts are artificially and unfairly inflated,” Mr Berger said.

Mr Berger’s appeal follows a series of overvaluations. In one case, a mine in Broken Hill successfully reduced its valuation from $20.6M to $4.9M in an appeal before the Land and Environment Court. Broken Hill Council expects to have to repay $6.9M in rates.

Matt Kean, the Member for Hornsby and Chairman of the Parliamentary Committee overseeing the Valuer General’s Office says he is “extremely frustrated” by the objection system.

“We need an objection system that gives people a fair go. I am very concerned by the costs of the appeals process, and we will be making a number of recommendations to improve the equity in the system”, he said.

Mr Kean’s Committee is currently holding a public enquiry into the Land Valuation System and is due to report back to the Government in April.

Immediate Release

Media Contact

Mr Lesli Berger

General Manager

Fivex