Land valuation glossary
This glossary defines key terms and words that you will find on your Notice of Valuation or other related material.
About the glossary of terms
The purpose of this glossary is to help people understand the words and terms used in their notices of valuation and related material from the Valuer General.
B
Benchmark property
A property that represents most properties in a component. Valuers use the primary benchmark to calculate the component factor.
C
Component
A group of properties, used for mass valuation, whose market values move uniformly.
Component factor
Valuers individually value the primary benchmark to calculate the rate of change from last year. They consider factors such as the land’s:
- most valuable use
- zoning, heritage restrictions or other use constraints
- size, shape and features
- location and views
- nearby development and infrastructure.
The rate of change is called the component factor.
D
Date valuation made
The actual date on which the valuer performs the valuation. The physical condition of the land and the way it can be used on the date the valuation is made must be assumed to be the same as at 1 July.
E
Easement
A landowner’s acquired legal right over another’s land. Valuers do not take easements into account, as valuations must assume land is free of impediments to title. But the land value will reflect any physical effects of works within an easement, such as transmission lines, access roads or drainage pipes.
F
Fee simple
The highest form of land ownership. It is the absolute title to the land, free of any claims against it. This gives valuations a common basis to ensure rates and taxes are levied fairly.
The actual title vested in the owner may differ from fee simple as used for valuation, due to the effect of caveats, covenants or other restrictions.
H
Heritage properties
Two different acts recognise heritage restricted properties for rating and tax. See Valuation assumptions and considerations for more information.
Highest and best use
A valuation concept referring to the possible use of a property that would give the highest market value. The use must be lawful, physically possible and financially feasible.
I
Improvement
Something that improves the value of the land. The Valuation of Land Act 1916 does not define this term, and it is different from the term “land improvement” below.
L
Land improvement
Land improvements may include draining, excavating, filling or clearing. These are included in the land value. See the Valuation of Land Act 1916.
Land value
The value of your land only. It does not include the value of your home, structural improvements or the legal effect of restrictions such as easements. But it includes works such as draining, excavating, filling, clearing and retaining walls. For consistency, land values reflect the property market as at 1 July in the valuing year. See the Valuation of Land Act 1916.
M
Median
The halfway value in a series of land values or sale prices from lowest to highest. Around half the properties in a location will have a higher value than the median, and half will have a lower value. For example, if nine property sale prices are arranged from lowest to highest, the median will be the fifth value.
The median shows the value of a typical property in a location, such as a suburb or local government area. Graphing this over time shows movement in value.
The median is different to the mean, or average.
R
Reference benchmarks:
Properties that represent higher and lower valued properties and other subgroups in a component. Valuers use reference benchmarks to check the quality of proposed valuations in a component.
Register of Land Values
The official record of land values for NSW. It contains information that includes ownership and lessee details, title details and the value of the land. It is a public register for the NSW Privacy and Personal Information Protection Act 1998. See the Valuation of Land Act 1916.
S
Supplementary valuation
A valuation outside the usual three-year cycle when changes to your property are recorded on the Register of Land Values. This can be due to subdivision, zoning changes or an amendment to land value (other than through the objection process). See Understanding your Notice of Valuation and our Supplementary Notice of Valuation factsheet for more information. See the Valuation of Land Act 1916.
V
Valuing year
The year starting 1 July. Valuation reflects the property market at the start of the valuing year. See the Valuation of Land Act 1916.