The Thames Star. Resurrexi. MONDAY, DECEMBER 9, 1895. RATING ON UNIMPROVED VALUE.

Thames Star, Volume XXVI, Issue 8221, 9 December 1895, Page 2

The Thames Star. Resurrexi. MONDAY, DECEMBER 9, 1895. RATING ON UNIMPROVED VALUE.

In a late issue we referred to thftßjß passed last session by the House ;Hl Representatives dealing with tiriioi^op; the unimproved yaluec)f Jtefim.-^'at I should beJioji^^jHw A^Jaife Bill y^^^^H^^^^^^^Bcter—that it j^^^^^^^^^^^^Krities another At preon the annual capital value, and session gave the power Hp^on the unimproved value of the Bind. The amount to be recovered by I rate was not to exceed the sum received by either of the present systems of ratI ing, the object being to change the incidence. In connection with the words " unimproved value," there is some misunderstanding, especially as the phrase "prairie value" is also used, and in the sense of being synonymous with unimproved value. It is not so. Unimproved value means the value of land after the value of the buildings or other improvements has been deducted, Any standard of value may be given to the unimproved value. A quarter of an acre of land in the city of Auckland is worth a large sum, and ! is unimproved value is its worth after S the value of the buildings and improver ments have been deducted. The same rule would apply to say 500 acres in the country ; the improvements would be deducted, yet the standard of value would be quite different from the city standard. The "prairie value," on the other hand, is the value of the virgin soil, whether iv city or country, before its value has been affected by occupation or improvements, that is, without the value added, which is known as

unearned increment. In a previous article we dealt mainly with the effect the proposed legislation would have upon country land. In illustration as to the effect upon city properties we cannot do better than take the figures of the Town Clerk of Wellington, and quoted by the Plon. Wm. McCullough in the debate on the Bill in the Council:—

" The annual rating-value," says Mr Page, "of property in the city of Wellington is .£345,000, bringing in, at Is 3d in the pound, =£21,562 10s for the general pur- [ poses of the city. . . The total capital value of property within the city is put down by the Government at ,£5,865,778. The value of the ' improvement' is put at ,£2,432,749, leaving unimproved value to be .£3,440,182. ... In order to produce fche amount now raised by a rate at Is 3d in the pound on the annual value, a rate of Is lhd. in the pound would require to be levied on the unimproved capital value. Then, in order to see how it would affcet property in this city, we have taken fifty-nine properties of different kinds from the rate-books. They are made up as follows s (1) Thirteen blocks of land without buildings; (2) twenty-nine houses with ■land; (3) four hotels; (4) two offices; (.V) two jtifcores; ((j) five shops; (.7) two shops with dwellings attached; (8) one sawmill; (9) one bank.

"The above are fairly representative of the properties in the whole city. We have made an estimate of the unimproved value of these properties, and we find that the result would be as follows :—

"(1 ) I and now paying £34 12s (id per annui* i would pay, under the new system, ,£77 11s per annum, an increase of 125 per cent.

" (2.) Houses with land now paying <£132 6s 3d per annum would pay ,£l3l 14s 7d, a decrease of 11s 8d on the ttventy-nine properties.

"(3.) Hotels now paying .£139 Is 3d would pay £120 10s lid, adecreaseof about 13 per cent.

"(4.) Offices now paying £32 lls 3d would pay £31 17s i'd, a decrease of Ms Id.

" (5) Storee now paying J;62 10s would pay .£6O 12s Gd, a decrease of £1 17s 6d, or about 3 per cent.

" (G) Shops paying .£146 17s 6d would pay jfi!4s, a decrease .£1 17s 6d, or about d£l 5s per cent.

" (7.) Shops with dwellings now paying <£IO 6s 3d would pay ,£5 13s 9d, a, decrease of about 40 p»r cent.

" (8) Sawmill now paying £18 15s would pay .£34 7s (3d, an increase of So per cent, owing to its standing upon a valuable block of land in the heart of the city.

" (9) Bank now paying *28 2s t?4 would.

pay £50, an increase of nearly 75 per cent> for same reason as above,

" Tho point to bo noticed, is the fact that the rate on land, as was expected, would bo greatly increased, while the rate on valuable buildings standing on comparatively small blocks of land would be much reduced. It does not affect the smaller properties as much as I expected it would have done, as I find that all properties up to about ,£SO annual value would continue to pay very much tho same rates as now. Where there is a difference it is in their favour."

Thus it will be seen that where land is 1 highly improved, say carrying valuable ' buildings, the owners would have a less amount of taxation to pay, and the owners of unimproved lands, vacant allotments for instance, the men who, refusing their own capital, were quite willing to take advantage of their neighbors' industry, would have to pay more. By exempting improvements, encouragement is given to the expender or capitalist and the industries, and the holding of land for speculative purposes is discouraged. In fact, the man who had benefited largely by the unearned increment would be made to return some of it for*the benefit of those whose industry, thrift,, and enterprise had earned it for him,