LAND SETTLEMENT

Otago Daily Times, Issue 18760, 13 January 1923, Page 10

LAND SETTLEMENT

THE TAXATION SYSTEM. MILITATING AGAINST INVESTMENT.

(From Odb Own Correspondent.) AUCKLAND, January 12. The manner in which tho taxation system o: New Zealand is militating against inVi tmoht in land is the subject of a compl. int in a letter received by the New Z'.aland Immigration and Laud Settlement League. Tho writer states that he is at p. osent in a position to introduce oonsidorji le British capital, and also to influence t! a influx of the best class of immigrants i- to tho dominion from Great (Britain, t.jrvoral extensive areas of a highly suita >le nature have been submitted to the writer of the letter, he states, for the purpises mentioned. He adds that ho was much surprised to learn from a reliable legal source that under tho taxation. »yst m in vogue in this country any investment i n lands within New Zealand, either fer, development or other purposes, is prac-

tioolly prohibited. For instance, he says: (ij apparently should any individual syndicate or company arrange for an option over any landed property, liability is at once incurred for full stamp duty a* though an actual sale had been effected; (2) such option holders would be obliged to register as owners, and would then be liable lor land tax; (3) in matters such as those in which the writer is interested in connection with overseas-principals, it appears that, an absentee tax on the highest scale -would be demanded; (4) in the-event of .such lands being acquired and divided up into approved sections for intensive cultivation in agriculture, dairying, or other farming ; pursuits by approved agriculturalist immigrants, they would be rendered liable to further taxation in the way of income tax on the highest scale. The writer declared that such an acoumulation of taxation and other- impediments practically negatives any remunerative returns, and it is out of all question to recommend overseas principals to entertain land development and settlement in Now Zealand unless , some practical relief is afforded in connection with taxation. Ho odds that unless he can learn of some equitable reduction being made in connection with the taxation referred to he must of necessity cancel his overseas principals’ proposed arrangements. , Local inquiries elicited the fact that the Case put by the league’s correspondent is substantially correct. It was stated that if a group of financiers, a corporation, or a company decided to invest, say, £250,000 in land in New Zealand, and; assuming their intention to bo really to obtain a treasonable amount of interest on their money, or at most to enable a small profit on their capital, they would in the first place he' faced with an exceedingly heavy graduated laud tax. This (hey would have to pay although the land might comprise large unimproved areas which at present would return nothing in tire way of produce. An absentee tax would be another heavy burden on outside investor's. Another point ascertained was that such a combination, having invested in land in New Zealand, -would be classed as conducting the business of- land selling, because it would acquire these blocks of land for the purpose of reselling, and the profits made on these sales would accordingly bo liable to income tax. It is estimated that the combined land tax, absentee tax, and income tax. Jf any profits were made on reselling, would 6e so enormous that it would make the (working of such a scheme almost impracti'fcable.