Revaluing all properties on the Island for land tax purposes is quite a daunting task. There are over thirty-five thousand eight hundred (35,800) valuation units to value which range from small residential apartments through to a large power station.
The process of the revaluation and life cycle of the Valuation List falls broadly into 8 Stages.
1) Data Collection
Twelve months prior to the date of deposit of the draft Valuation List, rental survey forms are sent in respect of every valuation unit to the taxpayer of record.
The survey forms have a list of questions to establish whether or not the unit is rented and if it is, the main details of that letting including the rent.
The rents collected from the survey forms are reviewed for accuracy and adjusted if the terms and conditions of the lease do not match the definition of ARV in the Act. For example, if the landlord pays for the electricity or provides services such as a maid as a condition of the lease then the rent must be adjusted to deduct the cost of these items from the rent.
Every property in Bermuda has been surveyed by the Department for land taxation purposes at some point in time with its value specific data collected on site and maintained in the Department's database. This data is used to analyse the rents taking into account location, property type, size of living accommodation, size of ancillary accommodation (e.g. storage), amenities (e.g. swimming pool) and any other characteristics specific to the individual unit which effect its rental value.
Not all properties are rented and not all properties that are rented provide reliable rental evidence which can be used to arrive at the statutory definition of ARV. An example of this is a unit that is rented to a family member at a discount. The best rental evidence is recent lettings to a new tenant at arm's length through a real estate agent.
3) Valuation Model Building
On completion of the analysis, the data is then used to create valuation models for the different property types and locations. The important adage here is "as you devalue, so you value". The method of analysis and the factor weightings used in the analysis must be equally applied in the valuation models built. The valuation models are then applied to all property records and the results are "stress tested" including comparing the results against actual rents of beacon properties.
4) Mass Appraisal
Once the valuation models have been completed, they are applied to all properties to arrive at the new ARVs. The results of this mass appraisal are subject to further review and tests before the new Draft Valuation List is completed and signed off by the Director.
5) Deposit of the Draft Valuation List (section 9 of the Act)
The Act requires that a copy of the Draft Valuation List shall be deposited in each Post Office across the Island. A copy of the Draft Valuation List is also available at the Department and online at www.landvaluation.bm .
6) Objections (section 11 of the Act)
Following deposit of the Draft Valuation List, Section 11 gives the authority for any person aggrieved by the Draft Valuation List up to 6 months to object to the Draft Valuation List on one or more of the grounds specified in the Act (Section 14):
a) that the annual rental value of any valuation unit appearing therein is incorrect or unfair having regard to other annual rental values in the draft valuation list;
b) that a valuation unit should not have been included in the draft valuation list;
c) that a valuation unit omitted from the draft valuation list should be included therein;
d) that a valuation unit included in a series or complex of valuation units as a single valuation unit on the draft valuation list should be listed separately there from or omitted there from;
e) that a valuation unit listed separately or omitted from the draft valuation list should be combined with one or more others of a series or complex of valuation units and listed as a single valuation list;
f) that the draft valuation list is incorrect in some other material particular, and on no other ground.
Rule 4 of the Land Valuation and Tax Act (Objections and Appeals) Rules 1967 stipulates that every notice of objection served on the Director pursuant to section 12 of the Act shall be on the prescribed form.
This means that any purported Objection not done and presented to the land Valuation Department will not be considered a valid objection for purposes of the and as such will not be accepted. The intending objector must fill in the prescribed objection form and submit it within the prescribed time-frame to the land valuation Department.
7) Tribunal Review and Confirmation (section 22 of the Act)
As soon as practicable after the determination of all the objections and proposals, other than those that are deferred, but not later than nine months after the date of notice of deposit of the Draft Valuation List, the Chairman of the Land Valuation Appeal Tribunal shall confirm the Draft Valuation List as amended.
The Draft Valuation List will then constitute the valuation list for Bermuda until replaced under the Act and shall have effect as from the effective date as specified in Section 26(4)(e)(ii) of the Act.
The Chairman signify confirmation of the Draft Valuation List under his signature and deposit the confirmed valuation list with the Director.
A notice of confirmation of the Draft Valuation List will be published in the Gazette.
8) Life and Tone of the Valuation List
Once the Draft Valuation List has been confirmed by the Chairman, it becomes the Valuation List until it is replaced under the Act. During the five year life of the Valuation List, amendments to the confirmed Valuation List for valuation units that are built, altered or demolished are made under Section 25 of the Act by way of proposal. These amendments are made based on the levels of value of valuation units in the list (tone of the List).
Should an aggrieved taxpayer wish to object to the proposed amendment, then you must do so within 28 days after the date of notice (if service by hand delivery or email). If service of the notice is by pre-paid post then you must do so within 31 days after the date of notice on the same grounds as in 6) Objections above.