I received a rates and valuation notice from the council and the valuation of the property is approximately $80,000 less than what I paid for it 6 months ago. This is my first mortgage property and I had previously rented.

Can this valuation be considered normal or have I paid an inflated amount in an inflated market?


The valuation notice from your Council is for the value of the Land only. The amount you paid for the property is for the Land and Building built on it.

When you build a new home on a parcel of land it might cost say $200,000 to build it. Over time the value of the building goes down (if you are renting out the house you can claim depreciation on the building).

It is the land that goes up in value over time, not the building. That is why the exact same house can be worth more in one area than another area - it is due to the land in the more expensive area being higher than the value of the land in the lower area - the house would be worth exactly the same in both areas, but the value of the land would be different.

In your case, your house might only be worth around $80,000 whilst the land is roughly worth as per the Council Valuation.

  • Most councils in Oz use something like the phrase “unimproved market value” to capture that the land is what is being valued, not including the building. – Peter K. Sep 5 '18 at 12:23
  • Thanks, according to kingston.vic.gov.au/Property-and-Development/Rates/… CIV: Capital Improved Value is the total market value of the land plus buildings and other improvements. so in my case the CIV is $80K less than what i paid for the property 6 months ago. – Ahsan Sep 6 '18 at 0:36

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