THE New Zealand Herald AND DAILY SOUTHERN CROSS FRIDAY, MAY 24, 1929. LAND AND VALUATIONS.

New Zealand Herald, Volume LXVI, Issue 20263, 24 May 1929, Page 10

THE New Zealand Herald AND DAILY SOUTHERN CROSS FRIDAY, MAY 24, 1929. LAND AND VALUATIONS.

A leading business man in Dunedin, io a considered statement made publicly, has cast very serious doubt on the present condition of land valuations current in New Zealand. Values, in the market sense of the word, he considers are reaching a stable condition after their violent fluctuations under the successive influences of boom and slump. The figures appearing on the valuation rolls, however, those used for the assessment of taxes, are, in his opinion, so old in many instances as to be of little use as indicating the market value of the land. In proof of that, he instances occasions where land has changed hands at prices pounds per acre below the Government valuation, and cases in which the Land Purchase Board, negotiating on behalf of the State, has actually offered owners prices substantially below the figure on which the State was levying taxes. Coming from stich a source as it did, the statement naturally refers especially to conditions in Otago, but there is no reason to believe they are peculiar to that province. Indeed, it would probably bo quite easy to obtain hearty endorsement of the Dunedin man's views in districts very far distant from his proyince. The valuing of land for sale and the valuation of it for taxation are not exact processes. Both depend on the human factor too much for that. The most that can be expected is for a trained and acute specialist, official or unofficial, to make an approximation close enough, for ordinary practical purposes. Provision for error in the work of the Valuation Department is made, for there is an established procedure by which owners' objections can be heard and, if necessary, amendments made. To have valuations inaccurate through human fallibility is one thing, to have them thus because their reconsideration has lagged behind an alteration in land values is quite a,nother. It is one which demands very serious consideration. By the Valuation of Land Act, the value for taxation purposes, whether on the capital or unimproved basis, is supposed to be the fair selling value on the open market, in the one instance of the land as it is, in the other as if it carried no improvements. The tendency generally has been, according to Mr. Ritchie, who opened the whole question in Dunedin, to make the valuations conservatively, a policy both natural and commendable. The circumstances by which the position he alleges arises are that whereas up to the year 1897-98 general valuations for the whole of New Zealand were made periodically, since then portions have been revalued from time to time. The desirability of a general revaluation has occasionally been suggested in Parliament, but the official answer has always been tliafc there is not the necessary staff to do the work, it could not be found if wanted, and the expense in any event would be enormous. Whatever the value of that reason, strong presumptive evidence can be found to suggest there has been a serious lag in the process of revaluing as inflated values have gradually receded. Taking the counties alone—for it is rural land that is most in question—the total capital value in 1920, as shown by the valuation rolls, was £307,492,6(34, of which the unimproved value was assessed as £212,148,731. The corresponding figures for 1927 x the latest available, were £349,428,498 and £230,215,539. The years between cover the period in which deflation is supposed to have taken place; yet the valuations which are required to bear a direct relation to market price have shown a steady increase nearly all the time. As indicating a recognition that there should be reductions, the unimproved value for 1926 shows a reduction of almost exactly £1,000,000 compared with 1925, that of 1927 a further reduction of rather less than £500,000. Even with this the total unimproved value in 1927 remains over £18,000,000 higher than in 1920 when inflation was still at its highest. It is an exceedingly difficult subject to generalise upon, from figures in the bulk, but there is room to suspect very strongly that much revaluation in a downward direction remains to be done.

The position then is that an experienced business man suggests valuations have remained at an obsolete figure while the actual market value of rural' land has receded substantially. So far as any figures are obtainable bearing on a position which is admittedly made up of a .mass of single instances, statistics support his view. Mr. Ritchie declares that until this position has been rectified, the reluctance of private lenders to make advances on rural security will continue. This is a possibility which has to be counted, but it must be recognised also that where the Government valuation is higher than it should be the landowner is paying more in taxation than the law requires of him. The actual assessment of land tax is a complicated business, but it all returns in the ultimate to the figure for each landowner shown on the valuation roll. If it is excessive, so is the taxation. For this reason, the position ought to be faced. Incidentally, various Ministerial hints about the compulsory acquisition of land for subdivision acquire a new significance in the light of this suggestion that valuations generally are obsolete. The figures on the district roll are taken as the basis for computing compensation for both land and im-

provementa in the event of compulsory purchase. A Government proceeding impetuously, without being very sure of the valuations, might easily commit the country to* dubious bargains. If it really does intend to try compulsory purchasing, the Government should have valuations brought up to date forthwith for its own protection. Whether it does or not, it should follow the same course in common justice to the rural taxpayer.