LAND VALUES

Dominion, Volume 21, Issue 17, 14 October 1927, Page 18

LAND VALUES

UNREASONABLENESS ALLEGED STATION OWNERS OBJECT r CLAIMS BEFORE COURT Alleging that the unimproved value of farm property in New Zealand had materially decreased in the last ten or fifteen years, and that the increase imposed by the recent Government valuation was therefore unjustified, the owners of the Terawhiti and Te Kamaru sheep stations, in the Makara county, appealed against the valuation of their properties before a sitting of the Assessment Court, presided over by Mr. J. G. L. Howitt, S.M., yesterday. ‘ Tho assessors were Mr. E. Campbell (representing tho Government.- Valuation Department) and Air. 11. F. Leighton (representing tho Makara County Council). ~ , ~ , r - Counsel for flio appellants, tho McMenamen family, owners of the Terawhiti and To Kamaru sheep stations, .was Air. H. F. Johnston, with him Mr. A. T. Young. Addressing tho Court, Air. Johnston eaid that tho issue was of the greatest importance to his clients, as it meant that if tho Government’s ,valuations were upheld tho business now fairly profitable would barely pay their way. The Terawhiti station, which comprised 6566 acres, and the Te Kamaru station of 4059 acres, were owned by the AlcMenamen family. Tho Court would be asked to assess its valuation not on a speculative basis but on figures, placed before it and on tho evidence of witnesses ■who were competent to express an opinion. It' was true that the value of the improvements was low, but that issue was not in dispute. The necessity for a reduction in tho unimproved value of land in tho Dominion was being discussed in Parliament and other public places, and it was impossible to discover any sound reason why the valuation should have been increased. If tho Court could discover a reason, every sheep-farmer in New Zealand would be satisfied. They had her© the extraordinary position of land valued in 1916 being, ’in 1927. most substantially increased in value. The reason for that increase would be put down by.most people to the fact that a gross mistake bad been made in 1916, but counsel contended that his figures would show conclusively that no such mistake had been made. Material Alteration? Tho Terawhiti station, continued Mr. Johnston, had been sold by auction in 1912 for £30.800. The unimproved value ol the place had not materially altered since then'. In . fact, the bulk ot'tho farming community was of the opinion that tho unimproved value of property in New Zealand had materially decreased in the last decade. In 191 b the capital valuation of the Terawhiti station was £36,465. and in 1927 £55.850, an increase of £19,385. The capital value had increased by 53 per cent., and the unimproved value by 91 per cent. In 1916, <£l62 4s. 7d. was paid in land tax, and in 1927 it had increased to £456, 3s. Cd. The Court, he submitted should take into consideration the tact that there was no access by road to the 5 MrT^Hewitt: I certainly think that would materially affect the unimproved VJ AIr.' Johnston: Yes; if a road were put through it would be done, of course, by tho local authority. There is no possibility of these properties being cut

' U3 Wifh regard to tho Te Kamaru station oounsol said that the capital value had been increased in 1927 by 31 per cent., and the unimproved value by 62 per cent. The increases, ho contended, could only he regarded as startling. So far as ths carrying capacity of the stations, was concerned there was very little dineronce. Te Kamaru, if anything, carrying h. slightly greater number of sheep to the aero than Terawhiti. The number of sheep carried on Terawhiti in 1916 was 9020 and in 1926, .9115. Although tho carrying capacity in 1916 and 19-6 was practically the same, evidence would be called to show that instead of being ablo to carry as many wot sheep in 1912 as in 1916 more dry sheep had to h© carried. In 1916 the value of the Terawhiti wool was .£5235 and in 1926 '£3861. Tn 1916. tho To Kamaru station carried 5721 sheep and in 1926, 6341. The wool, on the other hand, realised .£3120 in 1916 and in 1926, £2113. Over the fourteen years flip average yearly income from Terawhiti was £4BlO and for To Kamaru the average yearly income over a neriod of. thirteen years was £2592. Tie submitted that an increase in taxation was a grave injustice. The Acid Test. Sir Harold Beauchamp, chairman of directors of the Bank of New Zealand, said that hundreds of thousands of farmers’ balance sheets had passed through his hands. It was the practice to base the value of land upon its productivity over a number of years and nothing else. In his opinion land in the Dominion had been unduly inflated for a great many years, and until some readjustment was made, it would be useless to hope for any improvement in tho present financial position. There was no justification for tho increases under discussion, since the trend of land value in New Zealand was downward, not upward. Lie thought' every farmer was entitled to make as big* a profit as tho average mercantile man. For a long time past the farmer had been content to merely pay his way instead of endeavouring to put his money to the best advantage. Millions of ’ pounds would have to be written off in the DoWiir.ion before land values could bo placed on a proper basis. “Values Too High.” Air. Johnston; Generally speaking, do you know of any reason for saying that tho unimproved value of sheep farming land, in New Zealand has increased .within tho last ten years? Sir Harold Beauchamp: I can’t say that. I still think that the values are too high. Air. Mackie: I suppose 1 may take it that the very nature of the businesses you control inako it necessary that you should be well on tho conservative side? Sir Harold Beauchamp: Yes; reasonably conservative. Were you reported correctly when you made tho .statement recently that land in New Zealand to-day was not worth more than £4O an acre?—“Yes. I still hold that opinion. Years ago I laid down that principle, but a great many people differed, but T think that many who suffered will now say that I was quite right.” It ia practically impossible to buy land anywhere in New Zealand on its (productive value over a period of years?—“l know there is a very strong difference of opinion.” £5 an Acre. Eric. Kiddiford. a station-holder, described the two properties as being sec-ond-class sheep country. The capital value of the land to-day in bis opinion was £5 an acre. The properties, which were unsuitable for subdivision, were well stocked. The only access was by the sea. ITo considered that the increase in unimproved value had not been justified. Ho did not know of nny properties in New Zealand to-day that could bo bought on their producing value. Air. Johnston: Do you know of nny property where the unimproved value has increased in tho last ten years? Witness: No. When you speak of .£5 per acre value J take it you mean that is what you would give for tho properties if you were buving them?—“Yes.” Mr. Hewitt: T think what the Court Jias to determine is what tho land would bring if it were offered for sale on reasonable terms. Air. Johnston: That is so. Witness: If I could purchase these properties on reasonable terms I would Lot give more than £5 an acre. They fee not worth esoie.

Evidence as to tho carrying capacity of tho stations in 1916, and at the present time, was given by the managers, who stated that they considered tho increased unimproved values were not warranted. Deterioration Alleged. William Bell, a stock dealer and farmer, of Karori, said that the Terawhiti land had deteriorated, although the star tiou bad been particularly well manag cd. William Wheeler, an accountant, said that the cost of working the properly was fairly considerable. Less stock was being carried to-day tiian ten years ago, and ho anticipated a further decrease on account of the deterioration of tho land. 1 This concluded the case for the appellants. Th® Department's Case. For the Department it was contended that the increase in the unimproved value was not quite as great as the figures disclosed, in 1966 Terawhiti was valued at £32.207. In 1913 the capital value was £34,825, tho unimproved value £20,665, and improvements £14,160 That valuation was the subject of an appeal, and the owners at' that time estimated tho capital value at £28,(00, the unimproved value £12,000, and improvements £16,000. Tho appeal was heard before Air. W. G. Riddell, S.M., who reduced tho value to the 1906 figure, namely, £32,207. In 1916 the property was revalued, the capital value being estimated at £36,465, tho unimproved value at £20,665, and improvements at £15,500. The 1916 valuation was based on the average prices for the five years prior to and including 1916. It bad been contended that prices hid not increased since 1916. A recent revaluation of tho Makara county, however, showed that there had been an increase of about 50 per cent. “With regard to the evidence or Sir Harold Beauchamp,” said Air. Alackie, “frnin an academic point of view it was very interesting—(laughter)—but while we may desire to change the coloui' of the moon it is not within our power.” Tho Department, ho added, had endeavoured to assign a fair value of the lard. Criticism, of course, was inevitable, but surely officers of the Department with all information at their disposal were in a position to coma to a piopor conclusion. Evidence that the increase in unimproved value was justified was given by Robert North, of the Valuation Department. The Court reserved its decision.