Update to landholding valuation ruling for Victorian land holdersThe Victorian State Revenue Office ( SRO ) has recently issued updated guidance in relation to the valuation rules for land holdings in Victoria, and although the updated revenue ruling was issued on 7 December 2020, will be effective from 19 June 2019 .
The updated revenue ruling includes two particular changes, as follows:
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What is a "land holding"?The amendments to the definition of land holding are effective from 19 June 2019 and land holdings are not simply limited to interests in land, but can include interests in fixtures held separately from land and economic entitlements in land.
A land holder is any company or unit trust scheme (whether private or public) that has land holdings in Victoria with an unencumbered value of $1 million or more.
In determining whether a company or unit trust scheme is a land holder (and the amount of duty payable on a relevant acquisition), the value of its land holdings must be clearly identified. In certain circumstances, the company or unit trust scheme's land holdings may include interests in land held by linked entities and discretionary trusts, and land deemed to be owned as a result of any uncompleted agreements. |
What will the Commissioner accept as "formal valuation evidence"?The updated guidance also outlines the type of valuation evidence, and the circumstances where this may be needed, when determining whether a company or unit trust scheme is a land holder.
Generally, the Commissioner will require a taxpayer to obtain and provide a valuation from a competent valuer (i.e. either a certified practising valuer who is a member of the Australian Property Institute or a member of the Real Estate Institute of Victoria Ltd with sworn valuer accreditation) on any one or more of the company or unit trust scheme's land holdings if:
In specific circumstances, where a land holder has an interest in fixtures separately from the land on which they are located, or holds land on which items have been fixed by the landholder or another person, the Commissioner is willing to consider whether the written down book value of those fixtures provides a reasonable estimate of value in the absence of formal valuation evidence.
The Commissioner may accept the written down book value evidence as being reasonable if the fixtures have not been written down to a zero value and are general in nature (ie. air conditioning units in an office or display shelves in a retail store) and not bespoke or specialised items of plant and equipment. |
The updated revenue ruling includes some examples in relation to the two changes explained above, and they can been seen via the VIC SRO website – click here . |
Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further. |
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