PROVISION OF BILL

Rotorua Morning Post, Volume 1, Issue 194, 9 April 1932, Page 5

PROVISION OF BILL

("Post" Speciat Cbmmissioner.)

MINIMUM RATES SPECIFIED ON MORTGAGES OF LAND AND CHATTELS HIRE-PURCHASfe AGREEMENTS

" * WELLINGTON, Friday. The Expenditure Adjustmerit Bill gives effect to tlie proposal for the reduction of interest and rent. The Bill provides for a standard reduction iri interest and rent of 20 per cent., and applies tb interest payable under mortgages on property in the Dpipinion, and rent payable in fespect to land under existirig contracts. Specified clauses of moftgages may be excluded from the operrition of the Act by brder-in-Couneil, arid redutftions made under the Act, may not be increased except by leave of a ''competent Court hefore April i, 1935. Where provision hasi been made foi* a penal rate of interest or rent, or a redueed srate iri consideration pf prompt payment, both the penalty rate and the net rate are to be subject to the 20 per cent reduction. The reduction is to operate from April 1, 193.2, and in the case of payments already made since then at the h'grier rate, the excess is to he ereditod to the payer, or may be recovered by law. In the case of customary hire purchase agreements or in any other cases where the rate of interest is not specified, the parties are to determine for the purpose of the reduction contemplated by the Aet, what part of the money payable under the coritraet is deemed principle arid what part interest. Faibng agreemeftt, eithT er party may apply for a magisterial decision. Minimum Rates The nett interest rate payahle un- * der mortgage of chattels is riot to be redueed below 6| per cent, and in the case of any other mortgage below five per cent. No rent is to be sp redueed to a total, after deduction of rebate to which the tenant may be entitled, and of rates, insurances, maintenace and repairs, which amount to less than five per cent. of the capital value of farrii lands, or seven per cent in other cases. The right of appeal is provided for. Maehinery for effecting a reduction of interest by stamp duty on Goverm ment and local body securities and de-b-entures issued by compariies oi; other eorporatmns is set out uftder Parf 4 of the Bill, which applies to the following elasses of securities: Government debentures, including inscribed itock, State Advances and Rural Infcermediate debentures, local body debentures, debentures or debenture stock issued by "companies or inco.reorated societies or other bodies corporate.

Exemptions The following elasses, of securities ire specifically exempt: Treasury bills, Oost oflfice investment certificates, debentures or other securities issued in respect of investments or money be'onging to the superannuation fuiid or Mat'onal Provident Fund. All interqst 'ioupons or warrants , presented . foi; payment in the Dominion after April 1932 are to be chargeable with stariip iuty at the rate of sixp'ence for every five shillings or portion thefeof. In iases where coupons or warrants are not presented, stamp duty is to be fiiarged at the same rate. If interest payabl-e in New Zealand s paid out of New Zealand otherwise rhan in pursuance of an express cdritract for it to be so paid, the duty vvill be payable on or before collectidrt in New Zealand of the amount paid out of the country, Payment of duty will he denoted hy . an, adhesive stamp or stamps, affixed , and cancelled by the holder of a'cou- ■ ' oon or warrant prior to presentatiori of the warrant; or' otherwise shall ;; be affixed to the interest receipts. The - ordinary twopenny stamp duty on receipts for amounts exceeding £2 will not be chargeable where the new stamp duty is imposed. Owner ship Transferred Where the ownership of any secur-, . :ity has been transferred six months ; prior to March 14, 1932, applieationr : [may be made for a refund of -the ' ivhole or portion of the stamp duty""' paid in respect bf interest payahle in ; any period pripr to the tlansfer of * such security. The applicant must he _ able to show his inahility to recover the amount of the duty froni the holder of the security. Refunds may be ordered by the Minister of Finance, to be recovered from the seller of ihe security as a debt due ta the Crowfi. Local authorities and companies af e f to reeeive the net duty on. interest on their security after deduction bf " five per cent for administration costs'. The maximum rate of interest , payable on deposits by savings banks or building arid investmept societies may be fixed by Order-imCouncil. The Governor-General may also fix , by Order-in-Council the maximum rate of interest priyable by trading companies on - deposits held by them. Ths section does" not apply to banks, including the Post Oflfiee Savingri Bank and private savings hanks, arid local authorities or public bodieS.