APPEAL UPHELD

Rotorua Morning Post, Volume 2, Issue 573, 3 July 1933, Page 5

APPEAL UPHELD

ASSESSMENT QQJJHT BANK OF AUSTRALASIA GAINS SUBSTANTIAL RELIEF REVALUATION OF PROPERTY An important decision was made by the Valuation Assessment Court sitting in Rotorua on Saturday morning when the Bank of Australasia appealed against a revaluation made of the bank premises situated on the corner of Hinemoa and Tutanekai Streets. The court consisted of Mr. J. G. L. Hewitt, S'.M. (president) , Messrs. J. C. Potts (Government representative) and E. La Trbb'e Hill (assessor for the Rotorua* bofough) . The revaluation as ass'essed hy the department was a capiial value of £7550 consisting of uniniproved value" £2550 and value of improvements £5000. The bank objected and requested that the valuation be reduced to £4763 capital value, unimproved £1500 and value of improvements £3263. It was elaimed that the revaiuation, instead. of reducing existing values had resulted in a substantial increase on the 1 9 2'3 valuation. Case for Appellauts Mr. J. D. Davys appeared for the Bank of Australasia and Mr. E. A. Meredith, district valuef,'for the Valuation Department. ' Called by Mr, Davys, George Lodge said that he was a builder and contractor in Rotorua and had done practically all of the Government jobs in the district for about 18 months, including all houses on the Ngakuru and Pongakawa blocks. He was one of the tenderers for the bank buildings, his priee being £5300. He' had not secured the contract. In his opinion building costs had been reduced by 20 per cent., representirig cost of materials and wages. At' the time of the contract tenderers were safe in adding 10 to 15 per' cent on their estimate and be within" th'e first three tenderers. He had added £300' to his tender for profit. He had been inf ormed that the successful tenderer had made over £500 profit. In tend-; ering to-day there was no profit,** a builder working on discounts only besides wages. He considered that if the bank premises were put up for rmblic tender to-day the cost of £5437 would be reduced in tender by 33 1-3 per cent to 20 per cent, representing .ower cost of materials and wages, cind 13 1-3 per cent eut in contraccors estimated profits. The. value would thus be reduced to £3625. He said he was eonvinced that the bank could be built to-day for £3625. Allowiiig 2 pei* cent depreeiation as permitted by the Land and Income Tax Department the depreeiation over the past five years would be £362, reducing the present day value of the." building to £3263.. C. M. Young, manager of the Bank of Australasia, gave evidence that tbe depreeiation of the building was substantial in view of the fact that the building had eracked badly. - He stated that the hank purchased the land in 1924 at a leasehold value of £1600 and secured the freehold in 1927 at a cost of £320, a total of £1920. No Increased Value E. Earle Vaile stated that he was a member of the Assessment Court which dealt with some 800 appeals against revaluations in Rotorua in 1923. He produced the values agreed on by the court for Tutanekai Street. In his opinion values had not increased between 1923 and the present date. The reverse was the case.. In 1923 butter fat was ls 6d per 1b, with one penny bonus and wool was selling well. To increase values when tha country's farming produce was* selling at about one half the 1923 value was out of all reason as only creating a fictitious value. He valued the, bank premises to he between £25 and £40 a foot. Addressing the Court, Mr. Davys submitted that in 1923 landlords were receiving only a small prop.Oi'tion of tenants' profits. To-d&y tenants were endeavouring to keep business together and were ekeing out a mere existence after payirig rentals. All these rentals had been reduced by 20 per cent and many bfy more. Many leases held at the present time had been signed during the "boom" period and rental rbturns were thus not a fair basis on which to assess valuations. To raise values at the present time and thus plaCe a larger burden of taxation on the business area he considered "heither fair, just nor right." Valuation Warranted Placing the department's view, Mr. Meredith stated hi's sympathies were with Mr Davys' appeal as he had suffered a 30 per cent eut in his own salary. " However, he quoted a sale of land in Tutanekai Street at £63 a foot two "years ago and basing the value of land on rental value, or returns from rents, a value of £70 a foot was warranted. He stated 'that values in Tutanekai Street had advanced considerably since 1923. After *a shoft' adjournment the president announced that the court had agreed* to assess the value as £5250, the* unimproved value being assessed at £1950 and the improved as £3300. Other Cases In the following other appeals placed before the court the original valuations were sustained in each case. * - • Whakatane: James Martin, G. S. Whiteside and C. G. Lucas. Te Puke: Joseph Watson. Tauranga: T. Tanner and estate of S. Spence. _ Taupo: E. A. Price (two properties) . -