Unimproved Or Capital Value

Chronicle (Levin), 11 February 1949, Page 3

Unimproved Or Capital Value

"Tofnorrow the ratepayers of the borough of Shannon will have to d,ecide whether they will give authority to the Shannon Borough Council to change the rating of the borough from the capital value system, which has been in operation since Shannon was constituted a borough in 1917, to the unimproved value system. There are points for and against the proposed cha,nge. Last evening some' 7.0 ratepayers and other interested pbrsons gathered at the Renown Thektre to hear Mr. Rolland O'Regan, F.R.0-S1 (Eiig.) ^,F.R.A.C.S., a New Zealand authority on rating systems, outline his views in favour of the unimproved system. 1 " '

After beihg introduced by the Mayor (Mr.; t"D. A.: Fitzgeraid), Mr. O'Regan stated his reasons for Jpeing interested ih' rating, an'd said that Saturday 's poli was one 'skirmish in' a large battle to overtnrow the system of rating on tne capital value, which was considered an anti-soci'al one. He pointed o.ut that rating on the unimproved value had been adopted by 14 local authorities since 1944. OL 75 boroughs in the Nortn Island, 62 were a'dopting the unimproved system of rating. Shannon was surrounded by such boroughs as Palmerston North, Levin, Otaki and Foxton, all of which were rated on the unimproved system, he continued. They ■had progressed while Shannon had stood stiil. Although neighbouring 'towns . had progressc'd, Shannon !had five State nouses five years !ago and now there were 11. This was an exa'mple of the progress of . Shannon. ,v Mr. O'Regan stated that if a person tried to build a house costing £3000 he would be rated to the extent ' of £50 per year. The borough was "putting the boot in," , whereas it was possible to huild in boroughs operating the unimprove'd value without paying tax on the 'cost of' the building, only on the |va"ue of the propefty. Un*der Shannon's present system a section ! covered in weeds and rated at about 1 10s per year would jump to £50 if a jreasonable dwelling was erected upon it. Change Helped Levin Mr. O'Regan wenu on to quote • the Levin borough, which had jadvanced, consrderably by unim- ' proved rating. In that borough iland which had formerly been held . was now being subdivided and sold ; for buil'ding sites, because the rates were the. - same for a section , whether a building was on tne land or not. Tnere, were no reasons,. said the spe^keV,|vhy anMn^usthy- c.duld not qome" to "Shannon as the town was, I in "a , s.mai'l way, a' 'cultured centre, but whenever -an offer was made for. a suitable section to build an industry, land, values increased. consrderably. ,,rfhis Would drive industry away YrW SKaTiH'ctff, 'Vherdds the? position would 'be overcome if rating was on the unimproved system, as the land would be rated on the va.lue and not on atea. '"Referring to the present revaTuatibn'' of the borough," the speaker sai'd that this., would not alter thd:,/bdjPUgh^.yailuation to a great exf'eilt:^-' It • %otild, in some cases, only aggi'ayate it, as the valuatib-n ^depart'me'nt was com-f pelled to give "af property a fair selling value. Mr. O'Regan pointed out that in many cases in Shannon the rates derived from vacant sections would not pay the maintenance costs of the roads which ran past them, let alone the library, footpaths, street lights and other amenities offered by the council. Effect on Urban Farms 1 The speaker dealt at length with the relief obtaine'd under the Urban Farm Rating Act for farrm lands within the borough, and said that the Act provided special valuation for all genuine farm lands, from which all or the greater part of the owner's income was derived, the court being the sole judge of what was a fair thing. Mr. O'Regan went on to quote the number of houses built in Levin since that borough adopted the- unimprove'd value, and said 'that Levin's progress had been j^tim-ulated by the system. Attention was drawn to the rates paid by the owner of a small new house in Shannon, as an example a house rated at £18 per year. "This is not! considered a rate but a rent. Let the vacant section holders pay a bit of rent, too. The rates do not' increase if the owner uses his land," .concluded Mr. O'Regan. ( The invitation to answer quesI tions brought forward considerable discussion and important questions were asked by ratepayers and answered by the speaker. • j Question And Answer ' In Mr\ H. Aitchison's opinion, he experienced some 'difficulty in receiving an answer to his question of whether it was considered too much to farm a property on which the rates would be between £3 and £3 10s per aci-e. Mr. N. M. Thomson, of Levin, pointed out that in Levin a 40-acre block was paying £30 rates under capital value and under the urban farm land, whexeas in 1946 when unimprove'd value was adopted the same property paid £133 and was still on the urban farm land list. Another property of 20 acres paid £9 in 1944 and was increased to £30. A 10-acre block paid £23 in rates in 1944 and £40 today. Both were under the Urban Farm Land Act. To this Mr. O'Regan replied that this was possible, but there were farm lands where the position was the reverse since the introduction of unimproved rating in Levin. It was possible to find instances on both sides. Mr. R. Hook quoted a case where A block of land was subdivided *

some 20 years ago and only three building sections had been sold in that time out of eight acres, or 32 building sites. Mr. O'Regan assured him that the secdons wouid be sold within five years if Shannon -a'dopted unimproved rating on Saturday. Mr. R. R. Lind asked why it was that the Catchment Board, the youngest local body, had written into its act that rating should be • on the capital value. Mr. O'Regan stated that a catchment board struck its rates on whatever system was in operation in the area, and quoted several inSLances where the catchment rate was on the unimproved value. Mr. Lind pointed out that it was written into the act that the rating should be on the capital value. Mr. O'Regan said that this was not the case as rates could be levied on capital va.ue or a similar amount on unimproved value. | Mr. Thomson asked if the speaker was aware tnat in Levin in spite of the stabilisation regulations and fair rents act the rents of praclically every business premises in the •main street had been increased by order of the Magistrates' Court tover the last two years from between 50 to 100 per cent., solely on h,ccount of the terrific increase in rates in the business area. Rates on Shap Properties Mr. O'Regan replied that he was not going to say what effect the rates would have on shops, because , he did not know. Levin had a poor Jmain street, as the buildings were not "up-to-date and high value'd sites were not carrying good bui.dings, so they "got it in the neck." He then quoted Hutt City, where there was no business core, and there had been no change in the rates since the alteration of the rating system. This heavy rating only applied where there were poor buildings in the main street, and this woul'd be the case in Shannon." The answer was to have good buildings. Mr. J. Carter asked if it was not a fact that the Hutt boundary had been extended several times to include a bigger area, and so there woul'd be a bigger draw on rates. • Mr. O'Regan said' that this was so, but an extension of the boundary did not necessarily mean an increase in revenue. Some four thousand State houses had beenincluded in Hutt. He then quoted the vast expenditure involve'd by! .the. Wellington City Council when riew ' areas and neighbouring boroughs were taken into the city area. At this stage Mr. Aitchison pointed out that he had not received 'an answer to his former question. It was suggested that Mr. A. W. Parton answer it. Mr. Parton rose to his feet amid interjections from the audience regarding his former ad'dress in Shannon in support of the unimproved rating. He said that in. some cases rural rating did not come out fair to farmers. He quoted at length his own case of an increase in rates from £19 to £51, yet said he had supported the scheme as it bettere'd the borough as a whole. He mentioned that rates were heavy on farmlands where the owner was not deriving his whole livelihood from the property. In conclusion, he quoted Levin's building advancement over the past 25 years. At the conclusion of Mr. O'Regan's address* a vote of thanks for the most able manner in which he had outline'd the position and answered the questions was moved by Mr. Thomson and seconded by Mr. L. G. Sayer. This was carried by acclamation.