VALUATION OF LAND.

Press, Volume LXVIII, Issue 20552, 21 May 1932, Page 15

VALUATION OF LAND.

REVIEW OF LAWS.

FIRST ACT IN 1878. In. view of the criticism of the present system of land valuation which took place at the annual conference of the North Canterbury district branch of the New Zealand Farmers' Union this week, it is appropriate to review the laws under which valuation has operated since it was commenced.

The system of separately assessing the value of land itself and the value of buildings and improvements effected. thereon was first put into operation in. New Zealand for the purpose of State taxation on the passing of the Lands Tax Act, 1878, under which a tax was levied on land values, the impost being id in the £ on capital value of real estate, less the assessed value of the improvements. The land tax of 1878 was repealed in the following year and was superseded by the Property Tax Act of 1879, which provided for a levy of Id in the £ on, the eapital value of all property, real and personal, above the amount of £SOO in value. Property Tax. The Property Tax of 1879 was in its turn repealed in 1891 and superseded by the Land Tax and Income Assessment Act of 1891. Under this enactment a land tax was imposed on land and mortgages of land with the exception of improvements on land up to £3OOO. An exception from income tax was also allowed on all incomes derived from land and mortgages of land." Two years later, under the provision of the Land and Income Tax Amendment Act of 1893, all improvements in land were entirely exempted. An endeavour to extend the principle of general exclusion of improvements to local taxation resulted in the passing of the Bating on Unimproved Value Act of 1896, which gave local authorities the option of deciding that equivalent rates on the unimproved values of lands should be substituted for the rates levied on capital value, or on annual values. Not a Uniform Basis. Valuing on land was not, however, conducted on a uniform basis. Each local authority worked quite independently and .employed as valuers those . whom it thought fit. The Land Tax Department periodically employed a small army of temporary valuers when it required a new valuation of lands for taxation purposes, and each local authority had its own particular' methods of making up its.Toll for the levying of rates. In some instances, however, an undesirable class of men. were engaged, which resulted in unevenness of values in a good many cases. Values fluctuated to a dangerous degree, some being too high, based as they were on speculative values, while others were too low. The position was, in fact, found to be bo unsatisfactory that it became necessary to set up a new style of valuation by which all valuations required for Government Departments, whether for loan, taxation, or other purposes, and by local bodies rating on capital or unimproved value, should be made by valuers employed at fixed salaries by the State and responsible to "the Government alone/ The Government Valuation Act of 1896 .was passed providing .for a separate Department of State altogether ' independent of ,the Land and Income Tax Department, and this Department was charged with the duty of estimating the values of real estate in New Zealand for taxation'and other Government, purposes.and local rating purposes.* •

Valuation of Land Land to-day is valued, apt assessed,' under the Valuation of' Xaud Act, t a valuation being, the process of determining what a particular piece of "landmight, be worth for the best, oseL to which it is adapted, whereas an assessment is the process of defaowrong what the same'land might ' oe" worth use to which it is applied. The duly of , a value? is to examine "eaoft and to estimate to tbo of .ability: (1) the, unimproved" valne of the land contained thereon;.' the f value' . of the buildings, or other improverhejits upon such land, and (3)" the capital value of the property. - In carrying oat their duties valuers are expected : to ; determine value neither above nor -below a fair selling value. It might be urged that values should be made on the producing capacity of the' land. .-As a>matter of fafct, this must more or less regulate the seeing price. . Ljdjrectly, therefore, the producing power of. the land is already - a factor in determining the value of land under the present law: 1 ""The impossibility of adapting producing-power as the sole basis of valuation of land is at once apparent when fully considered. Land might be capable of producing a good deal in the hands of one man but not in another. An important factor.in valuation is that it cannot *.be brought down to a scientific basis owing to the varying nature of climate,, ability of the farmers concerned, and the Changing value of primary products. '..