XN000022-1976-11-22 — Page 3

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MONDAY, NOVEMBER 22, 1976

+HOWEVER, THE DIRECT EFFECT OF THE REVALUATION ON RATEPAYERS DEPENDS VERY MUCH ON THE PERCENTAGE RATES DETERMINED BY THE LEGISLATIVE COUNCIL, HE ADDED.

+ THE PRESENT RATES ARE 12 PER CENT GENERAL AND 6 PER CENT URBAN COUNCIL IN THE URBAN AREAS, WITH REDUCTIONS OF 1 OR 2 PER CENT IN CERTAIN CIRCUMSTANCES, AND LESSER PERCENTAGES IN THE AREAS OF THE NEW TERRITORIES BROUGHT INTO RATING SINCE 1974, + HE SAID. +THE PERCENTAGE RATES FOR 1977-78 HAVE, OF COURSE, YET TO BE DETERMINED.+

MR. FRY STRESSED THAT RATES WERE A CHARGE ON OCCUPIERS IN RESPECT OF THE PROVISION BY GOVERNMENT AND THE URBAN COUNCIL OF SERVICES WHICH THEY, AS OCCUPIERS OF REAL PROPERTY, WERE ASSUMED TO ENJOY.

+AS RATES ARE PRIMARILY A CHARGE TO OCCUPIERS, GOVERNMENT HAS NOW PROVIDED THAT, WHERE A LANDLORD HAS ACCEPTED CONTRACTURAL RESPONSIBILITY FOR THE PAYMENT OF RATES, THAT IS WHERE THE RENT IS INCLUSIVE', AND THE TENANCY IS ONE CONTROLLED UNDER THE LANDLORD AND TENANT ORDINANCE GENERALLY ANY INCREASE IN THE AMOUNT OF RATES PAYABLE (OR THE AMOUNT OF RATES IMPOSED FOR THE FIRST TIME IN NEW AREAS) CAN BE PASSED ON BY THE LANDLORD TO HIS TENANT,+ HE SAID.

MR. FRY SPOKE AT LENGTH ON THE DIFFERENT TECHNIQUES AND APPROACHES REQUIRED IN MAKING RATING VALUATION FOR THE MANY CLASSES OF TENEMENTS SUCH AS DIFFERENT KINDS OF DOMESTIC PREMISES, SHOPS, FACTORIES, OFFICES AND RECREATION CLUBS, WHICH ALL POSSESS SPECIAL VALUATION FEATURES.

IN THE FINAL ANALYSIS, HE SAID, RATING VALUATION IS NOT AN ARITHMETIC PROCESS.

+AT THE END OF THE TASK THE VALUER HAS TO USE HIS SKILL AND JUDGEMENT TO SATISFY HIMSELF THAT THE RESULTANT RATEABLE VALUE FAIRLY REPRESENTS THE RENT FROM YEAR TO YEAR WHICH THE TENEMENT MIGHT COMMAND IN THE OPEN MARKET, HE SAID. NO ARITHMETIC FORMULA OR COMPUTER PROGRAMME IS A SUBSTITUTE FOR SUCH JUDGEMENT, FOR THE PRACTICE OF VALUATION IS AN ART, NOT A SCIENCE.+

TURNING TO TAX, MR. FRY POINTED OUT THAT LOW RATEABLE VALUES, WHICH WERE USED AS BASE FIGURES IN THE ASSESSMENT OF PROPERTY TAX UP TO 1975-76, HAD RESULTED IN A CONSIDERABLE REVENUE LEAKAGE.

/HE RECALLED