LAND VALUES

Dominion, Volume 16, Issue 171, 7 April 1923, Page 3

LAND VALUES

A NEW SYSTEM WANTED. Sir,—The question “What is tho value of land” is a difficult one to settle 'at any time, and the correct method of arriving at what is the true value is befogged by the operation of the Valuation Department working under the Land Valuation Act of 1908, which says:— “The capital value of land is the sum which the owner’s estate or interest therein, if encumb.ered by any mortgage or other charge thereon, might bo expected to realise, at the time of valuation, if offered for sale on such reasonable terms and conditions as a bona fide seller might be expeoted to require.” The unimproved value is arrived at in the same way, assuming that there are no improvements on the land. The Act says: — “Improvements on land means all work actually done or material used thereon by the expenditure of capital or labour, by any owner or occupier of tho land, nevertheless in so far, only as the effect of such work or material is to increase the value of the land, and the benefit thereof is inexhausted at the time of valuation. Value of improvements means the sum by winch the improvements upon an owner’s land increase its value.” There can be no doubt as to what this means, if the land was put up to auction “under reasonable terms and conditions,” and by the way what are reasonable terms and conditions? The price it would bring, is the value tiic Valuation Department would place on it. As the land cannot be all placed on the market to find its value, the Department takes into account the socalled sales of land in the suriouud-

ing district, and from these sales places its value on the land. Productive capacity does not trouble the Department, although one well known valuer at the Assessment Court at Marton did admit that at. the back of his mind ho had to think of production. The terms under which land is or has been sold are 10 per cash, balance on paper. “To sell’ is defined as “to part with for some equiva--len in money,” “to exchange for money.” Is a paper representing 90 per cent, or even 80 per cent, of the value of land in boom times, or any other time, the equivalent of money, is 10 per cent, or even 20 per cent, cash a reasonable term or condition ? . Now, what is tne proportion of farms that are bought and sold, and who are they who buy and sell? It is doubtful if 15 per cent, of the farms in this or surrounding districts have changed hands during the last five years; sales due to deaths or subdivisions are hardly the same as sales of farms/ by men who then buy another farm. But say that 20 per cent, have been sold, that is one in five. Are these sellers people who spend money on improvements to make the land more productive and return bigger yields of butter-fat, better crops, or increase the carrying capacity? Do they set to work to plant trees and make a home? A certain amount of “licking into shape,” a temporary kind of improvement is often done, with usually the sole object of selling at an increased price. If 20 per cent, of the farms are sold, then 80 per cent, are not. Then, one farmer in every five, supported by land agents, auctioneers, agents, and lawyers, who all get a cash remuneration for their help, are the people who do the selling of land, and tho are the people who set the prices which guide the Valuation Department as to land values. Incidentally each land sale means that a fairly large amount of the actual cash belonging to both buyer and seller conies to rest in the town by way of advertising, commission, legal charges and duty- Is it not time that the other 80 per cent, of the farmers had a say as to the fixing of land Values on some basis in connection with the productive capacity of land? The Land Valuation Act should be cleared away and replaced by an Act called Tax Assessment Act or some such title, under which taxes (I suppose we cannot do without them in some form) could be assessed on the productive capacity, having regard to the situation. This would bring unimprc.ed land into full use. The Valuation Department would then not base its values on sales of farms often sold to men with little or no capital, and with no idea of making interest on the purchase, but trusting to sell again before long at an advance. These boosters of country values are also responsible for another matter that needs adjustment, that is, tho contributions from county councils towards hospital expenses, which is based on so much per thousand pounds valuation of town and country lands. Taken as a class, the town man is a business man, while the farmer is not, so the town man buys land in the town for his place of business at a price which will allow him a. return on his investment after paying expenses. How many farmers to-day are getting 5 per cent., or 3 per cent., on their land tax values, which is the value on which contribute to hospital maintenance. Another result of. land values being fixed without strict regard to productive capacity ig that the better business man a man is the less likely is he to buy a farm as an investment. but will begin a business in town, adding to the already too large number of people thus engaged. Annual meetings of farmers' unions will shortly be held, and this question- of land tax valuations and 'the effects thereof in the several wavs touched on above is one the members could well look into. —I am, etc., K. W. DALRYMPLE. Bulls, April 3.