Property Management

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Definitions

6. Property Valuations

All transactions involving property purchased and/or improved with government funds are to be based on a sworn valuation from a valuer with at least five years professional experience in the State of Victoria and current membership in the Australian Property Institute Incorporated.

The Government Land Monitor requires two valuations for property estimated to be above $500,000 in value one of which must be obtained from the Office of the Valuer-General.

Human Services will obtain a valuation from the Office of the Valuer-General, regardless of estimated value, for all property transactions as follows :

  • Disposal
  • Equity exchange
  • Equity buy-out
  • Construction/renovation

Organisations may elect to obtain a valuation from either a commercial valuer or from the Office of the Valuer General.

Any difference in valuations obtained from commercial valuers and from the Office of the Valuer-General will be resolved at a valuers conference.

Submissions to the Office of the Valuer General are to be made through the Human Services Capital Management Branch.

Purchase

Property value estimated to be less than $500,000 - 1 (one) valuation:

  • Commercial valuer; or
  • Office of the Valuer-General

Property value estimated to be above $500,000 - 2 (two) valuations:

  • Commercial valuer and Office of the Valuer-General; or
  • Office of the Valuer-General

The valuer is to be instructed to determine the capital improved value to be used as the basis for making an offer to purchase. The valuation is to comprise:

  • The land at market value; and
  • The capital improvements at replacement cost discounted for age and condition.

The valuer is to be instructed also to determine a margin representing an upper limit to which the organisation may consider bidding at auction.

Disposal

Property value estimated to be less than $500,000 - 1 (one) valuation:

  • Office of the Valuer-General (and commercial valuer at election of organisation).

Property value estimated to be above $500,000 - 2 (two) valuations :

  • Commercial valuer and Office of the Valuer-General; or
  • Office of the Valuer-General

The valuer is to be instructed to determine the capital improved value to be used as the reserve price for auction. The valuation is to comprise:

  • The land at market value; and
  • The capital improvements at replacement cost discounted for age and condition.

The valuation is to be used as the reserve price for auction. The valuer is to be instructed also to determine a margin representing a lower limit at which the organisation may consider negotiating a sale after auction if the property is passed-in.

The valuation is to provide a separate figure for land and for capital improvements.

Construction/Renovation

Regardless of value - 1 (one) valuation:

  • Office of the Valuer-General (and commercial valuer at election of organisation)

The valuer is to be instructed to determine the capital improved value for the purpose of determining proportional financial interests in the property. The valuation is to comprise:

  • The land at market value; and
  • The capital improvements at replacement cost.

Capital improvements are not discounted for age and condition because valuations are intended to determine their in-use value.

Equity Exchange and Equity Buy-Out

Regardless of value - 1 (one) valuation:

  • Office of the Valuer-General (and commercial valuer at election of organisation).

The valuer is to be instructed to determine the capital improved value for the purpose of determining proportional financial interests in the property. The valuation is to comprise:

  • The land at market value ; and
  • The capital improvements at replacement cost discounted for age and condition.

Capital improvements are discounted for age and condition because valuations are intended to determine their realisable value.

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For information relating to this page contact: Capital Management Branch, Ph: 61 3 9096 2030, capital@dhs.vic.gov.au
Site authorised by: Director, Capital Management Branch

Last Updated: 8 June, 2007
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