Rating on Unimproved Values.

Pukekohe & Waiuku Times, Volume 1, Issue 39, 29 October 1912, Page 1

Rating on Unimproved Values.

[TO THE EUITOK.] Sir,—ln reply tj the lette. by "Demos" there is a very important other side to this question. I noticed last week a letter in the "Waipa Post," which 1 would like you to reprint. "Ihe circulation throughout Te Awamutu of a petition praying for a poll to be taken on the question of unimf roved rating may be taken in tigoify that this popular but debatable method of raising the local revenue will very shortly be an issue in local politic. The Art provides tr.at a proportion of ratepayers on the roll varying irom 25 per cent., where the total number aoes not exceed 100, to 15 per cent, where the number exceed j 300, may, by demand in writing delivered to the chairman of ihe district, require that a proposal to rate property oa he basis of the unimproved value may be euomiited to the ratepayers, whose votes shall be taken between twenty-one and twenty-eUht days after delivery of the demand. Unfortunately, un improved rating is a question which ia thrashed out almost entirely as a matter of personal advantage or otherwise to the voter, and is rarely looked at from the point of view of the general good of the district. Rat-payers are all naturally filled with the laudable desire of avoiding the payment of rates, if such payment can be avoided by any legitimate meats, and on the face of it this system of rating seems lo pre' sent every prospect of a successful attainment of that worthy object. To the man possessed of buildings of greater value than the land on which they stand, the appeal is naturally irresistible, but it would be weP for such to bear in mind that the local revenue must be raised in some manner, and that a tow rate on the full capital value may amount to no mere than a high rate on the unimproved value. The advocates of this system put forward what they state to be two great points in favour of it; the first that it tends to bring about the erection of better and more substantial buildings; second, that it makes land speculalion, and the holding of sections that are unbuilt on a practical impossibility. It behoves us to analyse these so-called benefits, and particularly to see whether tbey are applic-

able to the conditions at present obtainit g in our own district. The first, that the standard of buildings will be improved, seems to us a statement that will not stand for much whin looked at from a commonsense and practical point of view. How many men about to erect business premises calculate and are affected in their expenditure by the probable amount of rates that will be payable on such buildings? In a very large number of cases buildings are erected as a mere speculation, and are intended f jr the use of others, ar.d the amount of the rateß is simply »dded to the rent paid by the tenant. The style ar,d value of town buildings depends almost entire], on the desire of the individual erecting such buildings to make a permanent job of the work, the kt owledge that a good building will let before an indifferent one, the amount of money available for the purpose, and rarely in our opinio* on the question of the amount of rates payable on it. The second point, that it prevents land speculation, and the holding of a numbtr of town sections without buildings on them is a much stronger me. Though we are none of us above making a bit on a land speculation should the opportunity offer, we are all united in condemning the practice (in other people) and bewailing the retarding effects on the progreis of the district of such speculation Supporters of unimproved I ratir g present us with, as it were, test cases showing the justice of their system, by giving instances of sections lying side by side, some wuh buildings, others without, those belonging to the speculator (the unbuilt on ones) paying a much less proportion of rates than those belonging to the public-spirited man who has advanced the g3od of the town by erecting a building thereon. It is indeed a queer thing that the man who has the temerity to own a piece of land without building on it should be termed a speculator, sometimes even a land shark, while the man who, for bis own sole benefit, and in order as he thinks to make more money out of it, erects thereon a building, should be considered somewhat, of a philanthropist! Now this question of unimproved rating is one that re-

quires careful consideration, and those who support it strongly now, under the belief that they are savirg money, may in the long run find that they have done themselves more harm than good. In fine the position is this, the system is designed to free all buildings from taxes and throw the entire burden on the land. Naturally the man with the costly building and small area of land is a srong supporter of it, but he m st bear in mind that the prevantion of land speculation may tend to increased building speculation, which may leave the costly buildings o-; his hands without tenants, or, perhaps, with a rent roll that may be quite inadequate to provide reaso able interest on the capital expended. There are many who believe that the erection of shops aud offices brings population, but this is undoubtedly a false hpyothetis, and it is better i'or all concerned that the increase in accommodation should keep time but not exceed the steady progress of a district. To the ratepay r with a moderate sized dwtllinghouse and a few acres in the suburbs, the system of uhimprovpd rating has very little to rrcommend it, for he may rest assured that ultimately he will be paying as much, perhaps more, for his f w acres alone than he was under the old system of rating on the cap.tal value. We trust that the question (till be rpproached in a fair spirit of enquiry, and every effort made to ascertain whether or no it will be a benefit to Te Awamutu. It must not be forgotten that should it be carried it will certainly nullify all attempts to extend the town boundaries beyond their present limits, and cause a diminution in the number of small holdings of a few acres which add so much to the charm and enjoyment of country life. It is a grave question whether Te Awamutu is in a sufficiently strong financial position to exempt practically two-thirds of its rateable property from paying rates. 'lhe present capital value (old valuation) of rateable property in Te Awamutu Is £125,000, and the unimproved value is £44,000. The system of unimproved rating, now in force in Te Awamutu, would exempt

£BI,OOO wotth of prrrerty from taxation and it ill be necessary to increase the prei.r.t rate three-fold to obtain the tame revenue. The figures for the re-valuation next year will probably bring t e cifference between the two values to well over £IOO.OOO. fan Te Awamutu afford to forego taxes on this large amount of property at the present juncture?" 1 think the conditions at Te Awamutu are on a par with those in Pukekohe. lam not concerned about the speculator in town lands, but 1 am anxious to know how the farm law's in this borough would be hit. — I am, etc., THE HILL