TAXATION OF BUILDING SOCIETIES.

Waipa Post, Volume 42, Issue 3303, 30 May 1931, Page 4

TAXATION OF BUILDING SOCIETIES.

Sir,—ln these times of crushing taxation inflicted on all classes of the community it is difficult to understand ohw it is that building societies escape. I believe these institutions pay nothing whatever—neither land nor income tax, company tax, nijr receipt and cheque stamps. ff"~~*[ The loss to the Government must be very great, and no doubt it is thought that the bororwers get the benefit, but such is not the case.

Interest is charged at 7 per cent, and fines inflicted if prompt payment is not made. There is a great opportunity for the combined building societies to make a general reduction in the interest on their mortgages, say, by 1 per cent, and by so doing the pious utterances of directors at their annual meetings will not be taken by the public as humbug. They are paying such very high dividends every year and putting thousands to reserve, which will doubtless in time be distributed as bonus shares, tha' they should be able to stand their share of the taxation troubles which every other trading concern has to face,—l am, etc.,

MORTGAGOR. [A representative of a buildine society made the following reply when the above leter was submitted to him: "Although the societies do not pay taxation, the recipients of incomes from them are liable for income tax. Building societies are in the position of savings banks, their funds being conserved to provide . the shareholders with homes. The funds of building societies are, in the main, made up of small weekly contributions, which in some cases represent a payment of sixpence per week per share. No profits are_ made by building societies for their own use."—Ed.]