OVER-BUILDING

Evening Post, Volume CV, Issue 124, 28 May 1928, Page 10

OVER-BUILDING

MELBOURNE'S LAMENT LOWER RENTS AND RATES HIGHER VALUATIONS Australia entered later than Now Zealand upon the task of import reduction, and Australia's deflating process is in a younger and perhaps sharper stage of its evolution. At any rate, the pinch in Melbourne seems to be fairly acute just now,'and it coincides with the operation of a revaluation which has' had the Hibernian effect of j making reduced rates higher. So also with land tax. The Federal Treasurer, besides giving farmers exemption from income tax for capital expenditure sunk in the improving of farm productivity, reduced the land tax by 10 per cent. The former concession does not'include city taxpayers, the latter docs. But the Melbourne citizen finds that the lower rate of tax on the new valuation hits him much harder than did the higher rate of tax on the old valuation. Ho would have been glad to do without the help of the tax reduction if he could have staved off the revaluation. gome Melbourne valuations have been raised by more than 200 per cent. "Though it is generaly believed that there has boon steady improvement in northern Elizabeth street in recent years (writes a Melbourne paper),.the Department's vision of a 220 per cent, increase, as hero indicated, is beyond 'the rosiest hopes of property owners in the locality. The facts arc that some land bought in this locality at an inflated value a year ago has since been offered at auction at a reduced figure, and has failed to find a buyer. "The statement of the Federal Troas-, urcr (Dr. Page), that if there had not been a 10 per cent, reduction in the rate, of land tax the amount of tax would have been higher still, is accepted by property owners wi+'.out much difficulty," writes "The Argus." "They cannot deny such an elementary fact. If the rate of taxation had been increased, the amount collected would have been higher still. But the rate of tax was reduced by 10 per cent, avowedly to ease the burden of the excessive imposts on property, and taxpayers find, to their astonishment, that they have to pay more. . The reason is that, while the tax rate has been reduced, tlie Departmental experts have declared that property is worth more than it was before the reduction in the tax rate was made. This is totally at variance with the experience of persons who try to sell their property to-day. If they ask the prices that ruled in an active market two years ago, they find no buyers. This applies in every part of Melbourne and suburbs, and in many country distriels. "What makes the position worse in the city is the distinct fall in rents that has occurred lately, and the large, number of empty tenancies. Overbuilding in "some places is admitted to be partly the cause of tho present low rents and vacant tenancies, but the persons Who suffer through excessive land tax valuations are those who have not been building or speculating in tho property market, but have simply been holding their businesses and business premises patiently trying to outlast a time of trade depression. Because others have in the past inflated the property market by buying certain sites at exalted prices, and erecting buildings to tho height limit irrespective of thi demand for office space, those who have carried on their own business normally and prudently find., that „t,beir taxes have actually been raised;, though theoretically, it is claimed, they have been reduced."