RATING ANOMALY

Hokitika Guardian, 28 January 1933, Page 6

RATING ANOMALY

CROWN’S EXEMPTION

LOCAL bodies suffering

CHIUSTCHURCH, January 2(5

All extraordinary position by which local Jtmdit'Sc lose, thousands of pounds in rates annually, briefly may be set out as follows: .When owners of proei’ty mortgaged to the Crown fail to. keep up their interest payments the Crown forecloses and becomes the owner.’of the property; the former owner is, then taken hack as a weekly tenant, paying the. Crown interest in the form of rent, and the . local body concerned, receives no more rates on the property, .since the Crown is liable for ujiy except'special rates.

The, .position is a .result of judgment delivered hy the Court of; Appeal about Id months ago. The Inglewood Boi'r ougli Council sued the Crown for rates outstanding a nd accumulating on a property ,in the Inglewood borough and the Supreme. Court allowed the claim. The case, however, was taken to the CQurt oPAppeal, which reversed the decision of the lower Court. Under the Rating Act the owner- ofa property is liable for rates and an occupier is held! to be an owner if he ; holds, a lease of three months or more. This the Crown circumvents by letting .the properties on which it hasforclosed on nothing more than a weekly basis. Since, also, the Crown in;no case can be held liable for rates or for arrears of rates, thanks to the judgment of the Court of Appeal in the Inglewood borough case, the local body in whose district the property is situated cannot el-ainr. either for arrears or for current rates. On the other , hand, if a private mortgagee forecloses on a-property he cannot take possession until he has paid J, h arrears of rates and is then responsible for all future current rates.

CROWN’S TRIFLING LIABILITY. ~ The Crown i s liable for special rates struck' by the local body as well as for,'the water rate, hut these fire trifles\in comparison with the total rat? which has to be paid by the priate mortgagee, often being less than seven percent of the full amount.

The Christchurch City Council is a heavy loser .thanks to this system. On one property which has been taken oyer by the Crown the full rates total. £5, I2s 8d; tjie Crown, however, will pay -only 2s 8d in special rates. Qn unothoij the Crown wil pay 6d whereas a private owner would bo nailed upon to pay £9 ‘2s sd. On a third the Crown! will pay Us Id, whereas a private owner would he .levied for £lO 15s 1.

iijNtheso times these cases are bej coining . increasingly common. Other loc#l ■ boditV round Christchurch are suffering in'the same way and, apart from the direct jnpiitary Joss involved,the extra office work necessary to find ouf, the exact amount of the. Crown’s Usually , trifling liability is costly. At‘the last Local Bodies’ Conference tho question was discussed though no definite action >vas taken-,,but- it is expected that at- the next it will he de■icidjed to. ask the- Government to introduce legislation to remedy this somewhat unfair, position.!. ~