UNIMPROVED VALUE RATING.

New Zealand Herald, Volume LXVI, Issue 20235, 20 April 1929, Page 16

UNIMPROVED VALUE RATING.

Sir, —Mr. J. Thornes should know that unimproved value is not what is commonly known ns prairie value, but that it is the market value of the land itself without taking into consideration improvements as defined by the Rating Act, 1925. The market value of the land in Mount Eden, then, is not the unimproved value as now appears on the Government valuation roll, hut a new valuation which is compulsory under section 47 of the Rating Act, 1025, if the poll is carried. The experience of districts about Auckland which have adopted unimproved values is that the assessment of land values lias considerably advanced, which has brought the unimproved value to a rating equality with existing capital value. This will be the probable experience in Mount Eden when it is borno in mind that no revaluation of land in the majority of cases taken place for many years. The averago dwelling will severely suffer bv a change to unimproved vhlues, for the large and valuable homes which pay on the capital value of the buildings will be relieved and the small sections on which nearly the whole area is covered with modern flats, accommodating a concentrated population, will escape almost scot free from the expense of administering the public utilities which are provided for their convenience. Unimproved value rating, therefore, will saddle the old dents of the borough and the average dwelling to the advantage of the newcomer and flat-dweller. The result of adopting the unimproved value system will be to transfer the bulk of the rates from the business and shoppng areas, where the most concentrated improvements exist, to the average dwelling, where moderate improvements exist. No doubt if the rates on an unoccupied section increase the selling value will decrease. The average section-holder has a considerable equity in his section, created by cash paid into it. This equity in many cases will disappear in the general stampede to sell and the decreased selling valuo will not only increase tho rates again, but will depreciate all property values adjacent, and so tho vicious circle goes on, with values coming down and rates going up, until the rate becomes a rent and a general stagnation prevails. In this event it will bo difficult to arrange satisfactory finance on the security of property should unimproved value rating be adopted, as it is well known that it is difficult to arrange adequate finance in other districts where rating on unimproved value exists. Whereas under capital value rating the new buildings practically pay for the increased cost of administration, tho newcomer and pockethandkerchief section, under unimproved, will be let in scot free, while the rates continually soar. Rating on unimproved values is illogical because it does not apportion taxation in accordance with service rendered, but upon the area of land held which bears no relation to service, it is unsafe because it places the average dwelling in jeopardy of serious depreciation, and it is unjust because it lets tho newcomer and flat-dweller in at tho expense of tho pioneer resident of the borough. S. Trevor Dibble.