The Struggle of Silverleaves Residents with Land Valuations
When Ken Hailey received his 2025 rates bill, he was taken aback to see the value of his land had dropped from $500,000 to $340,000. However, this reduction did not bring him relief. Instead, he felt that the valuation still overestimated the worth of his property. Mr. Hailey is a resident of Silverleaves, a low-lying community on Phillip Island in Victoria’s south-east. He and other locals are challenging their land tax valuations, arguing that they are too high due to a Melbourne Water flood overlay that restricts building on their land.
Silverleaves is facing significant challenges with coastal erosion, with the shoreline retreating up to 16 metres since 2022. The Bass Coast Planning Scheme warns that development in Silverleaves should be discouraged because of its vulnerability to coastal hazards like erosion and inundation. In 2024, the Victorian Civil and Administrative Tribunal (VCAT) refused to issue a permit for the construction of a home in Silverleaves, citing the risk of inundation. This decision by VCAT, along with previous refusals from Melbourne Water and the Bass Coast Shire Council, has led many residents to believe that their land cannot be used for construction and should therefore be valued lower.
Mr. Hailey took action by objecting to his rates bill, and in December, he received news that his valuation had been reduced to $85,000. This reduction was based on a High Court ruling in late 2025 that land tax should be assessed based on the site value of vacant land. He was informed this would be reflected in his next land tax bill for this year. After speaking with neighbors, Mr. Hailey realized that only those who had objected had received new valuations and lower bills.
He questioned the State Revenue Office (SRO) about why new land tax assessments hadn’t been issued to everyone in Silverleaves after the High Court ruling. He was told that all residents would receive a new valuation with their 2027 bill. Until then, he said he was told that unless a resident objected, the reduced rate would not apply. The ABC contacted the SRO for comment but did not receive a response.
Mr. Hailey described the situation as unfair to Silverleaves residents, many of whom are elderly or use their properties as holiday homes and may not be aware of the legal issues. “It seems ridiculous that the government is allowing for charges for land tax on properties when they know the figures are incorrect for the site values,” he said. “This year, the State Revenue Office (SRO) will be raising land tax revenue in Silverleaves, unless you object, on valuations that they know are wrong. I think this is inequitable and is contrary to what common sense says should happen, and seems to just be a tax grab.”
Political Response and Legal Perspectives
The issue of land valuations in Silverleaves has drawn attention from local politicians. Nationals MP for Eastern Victoria, Melina Bath, raised the matter in parliament, asking Treasurer Jaclyn Symes why hundreds of land tax notices were issued at odds with the court ruling. The treasurer responded that individuals have the right to raise objections to valuations and encouraged people to do so if they believe there is an issue.
“I get briefed from the SRO… in relation to how many errors are made in relation to valuations, and it’s very, very small. I cannot instruct the Valuer-General to do anything. It’s not in my portfolio,” Ms. Symes said.
Law Institute of Victoria former president Mark Woods emphasized that the High Court’s decision reinforced the science of land valuations. “People have always been concerned when they see valuations to make sure that they’re accurate, because otherwise they would pay far too much tax,” he said. He noted that the Valuation of Land Act does not require the Valuer-General to constantly monitor factors affecting land values in Victoria. Instead, the Valuer-General is obliged to consider what individual residents say has affected the valuation that has already been made.
Mr. Woods advised landholders to bring any new planning restrictions to the attention of the Valuer-General.
Concerns Over Building Restrictions
Tristan White, who lives a few streets away from Mr. Hailey, was also surprised by his valuation and objected, but has not yet received a response. He expressed a desire to renovate his property but has hesitated to apply for a permit out of fear it would be rejected. “The relaxation needs to be a common-sense view. We have been there for so long,” he said. “We’ve been hit twice here, once with Melbourne Water [rules] and once with the erosion.”
Melbourne Water acting executive general manager service futures Anna Lucas stated that the process for assessing development applications in flood-prone areas such as Silverleaves has not changed. “We apply the state’s Guidelines for Development in Flood Affected Areas to every individual proposal, ensuring consistency and transparency in our decision-making,” she said. “Each development application, whether it is for replacement dwellings or extensions, is evaluated on its specific merits under the established guidelines, with core considerations being the site’s designated flood level, the size and footprint of the proposed extension, together with the existing finished-floor level relative to the applicable flood benchmark.”
The state government has not responded to the ABC’s request for a response.
