Capital Improvement Value
In Victoria, the Capital Improved Value (CIV) of a property is tied to its annually conducted land valuation. It is the value of the land with consideration of the improvements that have been made to it. This includes any buildings such as your house and shed.
The difference between capital improved value and market value
CIV is actually a type of market value that can be determined by a land valuer. The main difference comes from the valuer’s approach to determining the CIV and the resources they use.
When the Capital Improved Value (CIV) is determined through land valuation, the property is valued remotely. The value is calculated in January of every year and reflects the CIV at that time. This valuation is used for calculating your vacant residual land tax liabilities.
Market value may be determined for any number of reasons and valuers typically use what is known as the comparison approach. Much of this methodology overlaps with the approach to calculating CIV. The considerations are then tailored to the needs of the report.
How accurate is capital improved value?
The accuracy of your land’s capital improved value may not be as accurate as the market value that has been determined by an independent valuer. Why? Well, it comes down to the physical inspection.
Since CIV is commonly used by the government, they are the ones calculating it and they do so via what is known as a desktop valuation. This is when a valuation is completed without a valuer’s visit. Without an inspection, the determined value is more of an estimate. Regardless, it is still well-researched and would closely resemble the worth of your property.
If you believe that your CIV determined by the VGV is inaccurate, you are able to object to their assessment with supportive evidence.
How can you find out your property’s capital improvement value?
You can have an independent land valuation. This is a paid premium service that provides a custom accurate report. Prices vary, but the report can be used in a variety of circumstances which cannot be said for the VGV land assessment.
An independent valuation may also be used to aid in the objection of the VGV land assessment in certain cases. This is ideal when you need to provide proof that the valuation provided by the VGV is inaccurate.
Ask the experts
If you need to independently determine the CIV of your property for tax or other purposes, the Melbourne Property Valuers Metro experts are available to help. We can answer any questions you may have that are specific to your situation. Contact us via our contact form or by calling our experts directly on (03) 9021 2007.