XN000022-1983-03-09 — Page 11

WEDNESDAY, MARCH 9, 1983

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NEW PROPERTY TAX ASSESSMENT MORE EQUITABLE'

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MEMBERS OF THE MONETARY POLICY GROUP OF UNOFFICIALS EXAMINING THE PROPOSED NEW SYSTEM OF ASSESSMENT OF PROPERTY TAX UNDER THE INLAND REVENUE (AMENDMENT) BILL 1983, CONSIDERED IT MORE EQUITABLE THAN THE EXISTING SYSTEM.

BUT, THE GROUP CONVENER, THE HON BILL BROWN, POINTED OUT. +IT IS ASSUMED THAT BY MAKING THE CHANGES DETAILED IN THIS BILL, THE GOVERNMENT HAS DECIDED NOT TO IMPLEMENT, AT LEAST FOR THE FORESEEABLE FUTURE, THE RECOMMENDATION CONTAINED IN THE REPORT OF THE THIRD INLAND REVENUE ORDINANCE REVIEW COMMITTEE, THAT 'THE EXPLOITATION OF THE OWNERSHIP OF PROPERTY SHOULD BE TREATED AS THE CARRYING ON OF A BUSINESS, CONSEQUENTLY SEPARATE PROPERTY TAX BE ABOLISHED'.

HE WAS SPEAKING AT THE RESUMED DEBATE ON THE BILL IN THE LEGISLATIVE COUNCIL TODAY.

THE BILL REPLACES THE EXISTING SYSTEM OF PROPERTY TAX ASSESSMENT - BASED ON VALUATIONS, WHICH NORMALLY REFLECT THE RENT AT WHICH THE PROPERTY MIGHT ́REASONABLY BE EXPECTED TO BE LET - WITH A SYSTEM BASED ON ACTUAL RENTS RECEIVED.

MR BROWN SAID THAT AFTER DISCUSSIONS WITH GOVERNMENT OFFICIALS, THE FOLLOWING POINTS IN CONNECTION WITH THE DEFINITION OF +CONSIDERATION+ (WHICH INCLUDES THE SUM OF MONEY, OR MONEY'S WORTH, PAYABLE TO THE OWNER FOR THE RIGHT OF USE OF THE PREMISES) HAD BEEN CLARIFIED:

* THE COST OF MANAGEMENT FORMS PART OF THE +CONSIDERATION+ WHERE A TENANT PAYS THE MANAGEMENT FEES DIRECT TO THE LANDLORD FOR THE BENEFIT OF THE LANDLORD HIMSELF. HOWEVER, IT WILL NOT BE INCLUDED IN THE +CONSIDERATION+ WHERE THE TENANT IS LIABLE TO PAY SUCH FEES TO, SAY, A MANAGEMENT COMPANY, BUT DOES SO VIA THE LANDLORD;

* WHERE THE LANDLORD IS CONTRACTUALLY LIABLE TO PAY THE

MANAGEMENT FEES BUT BUILDS SUCH FEES INTO THE RENTAL STRUCTURE, THE GROSS SUM IS INCLUDED IN THE +CONSIDERATION+; +CONSIDERATION+ DOES NOT INCLUDE RATES WHERE THE OWNER AGREES TO PAY THE RATES; AND

*

* AMOUNTS CHARGED TO TENANTS FOR THE USE OF FURNITURE WILL

NOT BE INCLUDED IN THE +CONSIDERATION+.

HE ALSO NOTED THAT AS THE WORDING IN THE BILL HAD CAUSED DOUBT IN SOME MINDS AS TO HOW ITS PROVISIONS WOULD BE INTERPRETED IN PRACTICE, THE COMMISSIONER OF INLAND REVENUE HAD ASSURED THAT:

* WHERE A PERSON IS ONLY THE OWNER OF A PROPERTY FOR PART

OF A YEAR OF ASSESSMENT HE IS ONLY TAXABLE IN RESPECT OF THAT PART OF THE YEAR FOR WHICH HE IS THE OWNER AND

WHERE