TAX ON UNIMPROVED LAND

New Zealand Herald, Volume LX, Issue 18456, 20 July 1923, Page 6

TAX ON UNIMPROVED LAND

EFFECT OF NEW PROVISIONS.

• NO DEDUCTIONS ALLOWED. v ,; By legislation ;in % 1920, > Parliament provided .H''-', that :in .; the ; case '.■ '/of "unimproved land"—this is, land on which there are not improvements equal to £1 an ; acr.i ror to one-third of tha unimproved value,- whichever is the les3— none of the exemptions provided by: section 4 of the Finance Act, 1917, shall be allowed,;: and ; ; the tax;.'; shall ; be increased by 50 : per cent. ; These provisions apply; only ; to land ,of which; the taxpayer has j been tho owner for three years .or up--1 wards, and, three years' notice wan given before they,'became effective. ' ;; The. cancellation of the! exemptions was made of considerable importance by the same legislation. Previously, in the > case of land subject to mortgage,/an exemption of £1500 was allowed oh. values up to £3000, diminishing .at,;the rata of £1 for every £2 (of value over £3000, so that no deduction -.was allowed 'after £6000. By the 1920 Act, the exemption was in'creased to £4000 in respect of values up to £6000, 1 diminishing 'at the rate ;of £2 for every £1 : : of the excess over; £6000, so that no exemption remained en values of £8000 or over. ■ r-h*- ~;^-'; The penal provisions have obviously the greatest effect in respect of ; valuations below £6000, l since they are deprived of th exemption of £4000. The , additional taxation is relatively lower on valuation* between £6000 and £8000, as tne i exemp- ; tion normally diminishes between those figures, while above - £8000 ;£ the (' only penalty is the additional 50 per cent. The following examples illustrate the position:

; The Commissioner ■of Taxes ; has : discretion to. impose the penal h taxation.-•; Explaining the operation- of..the law, this. Prime'Minister//states y that the position was clearly set out to the Sheepown Federation %by , the Commissioner of Taxes. The latter explained that -the department accepted :: the - Valuation Department's data in regard to , the improvements effected. Every landowner; v (the law applied to all lands outside boroughs) had!{been, given notice of : assessment; in cases where the figures showed that the improvements were '\, not , ; in accordance with the requirements of the Act. It was -then- the duty of the,;taxpayer, to write and state the facts of the case and the • appeal would be treated upon its merits. The law distinctly made provision, for .this appeal, and the notice of assessment sets .that out; The , Commissioner said he wished to 'give careful consideration to all ;. cases in .which owners were of opinion that their properties were sufficiently improved. The whole object of the provision in the Act was to avoid remission ', of taxation and to impose ad* ditional landv tax on :land which was being held purely for speculative purpose? and "without improvements being effected.

•■'■ ■',;. r\ :-.:>>:■'1922..-';f 1923. V ;.t i i Valuation, ■■'/. £»• a. d;' ,£•'■ 8. d. : : . M £1000 ' ... v" : '--:^ : .Nil. : :^6-17''-.8,"; : : • £2000 -- '«■-.' Nil..:-■■;': 14 8 9 ! £3000 ""— -• ; Nil. ■;■■.'.'.. 22 19 9 ■ £4000 -- . ' -» Nil. :■: '28 15 0 . £6000 .. -- •-'10 10 0" El 11 8 £7000 -•.;, -• 31 11 0 ■:.'■ 64 19 6 ': .£8000 '■■■'•-■: -i 66 0 0 • 77 0 07 £10.000 - - '.-«:- 81 2 8 100 7 6