XN000022-1983-07-08 — Page 5

FRIDAY, JULY 8, 1983

NEW PROPERTY TAX LAWS EXPLAINED

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THE NEW PROPERTY TAX LAWS, WHICH PROVIDE THAT PROPERTY TAX WILL BE CHARGED BY REFERENCE TO THE ACTUAL NET RENTAL INCOME INSTEAD OF A NOTIONAL ASSESSABLE VALUE, WILL TAKE EFFECT THIS YEAR,

THE COMMISSIONER OF INLAND REVENUE, MR VICTOR LADD, SAID TODAY (FRIDAY) THAT THIS NEW BASIS OF ASSESSMENT FOLLOWED THE GOVERNMENT'S ACCEPTANCE OF A RECOMMENDATION OF THE THIRD INLAND REVENUE ORDINANCE REVIEW COMMITTEE.

THE OLD SYSTEM OF PROPERTY TAX WAS BASED ON AN ANNUAL VALUE RELATED TO NOTIONAL RENTS, AND ALTHOUGH MANY ASSESSMENTS DID EQUATE WITH THE ACTUAL RENTS, THERE WERE STILL NUMEROUS CASES WHERE THE ASSESSMENT EITHER EXCEEDED OR WAS LESS THAN THE ACTUAL RENT RECEIVED BY THE OWNER.

+THIS WAS UNSATISFACTORY, BUT THE SYSTEM WAS TOLERATED BECAUSE OF ITS SIMPLICITY, MÁ LADD SAID.

THE NEW SYSTEM INTRODUCED TWO MAJOR CHANGES WHICH WOULD OPERATE TO THE MUTUAL ADVANTAGE OF PROPERTY OWNERS AND THE GOVERNMENT, MR LADD POINTED OUT.

FIRSTLY, THE LIABILITY FOR PAYMENT OF PROPERTY TAX NOW FALLS SQUARELY ON THE LEGAL OWNER, PREVIOUSLY, THE DEMAND NOTE WAS ADDRESSED TO THE PERSON WHO PAID THE RATES.

SECONDLY, THE AMOUNT OF TAX TO BE PAID IS CALCULATED ON THE ACTUAL RENT RECEIVABLE BY THE OWNER IN RESPECT OF THE YEAR OF ASSESSMENT.

MR LADD EMPHASISED THAT THE NEW SYSTEM MEANT THAT THE TAX LIABILITY WOULD BE RELATED TO THE OWNERS' ACTUAL INCOME FROM THE PROPERTY, AND THUS IF NO INCOME WAS RECEIVABLE NO TAX WOULD BE PAYABLE.

THE

THEREFORE, OWNER OCCUPIERS OR OWNERS OF VACANT PREMISES NO LONGER NEED TO MAKE SPECIFIC CLAIMS FOR EXEMPTION OR REFUND. ACTUAL INCOME RECEIVED COULD BE NOTIFIED TO THE COMMISSIONER OF INLAND REVENUE ON A SIMPLE RETURN FORM WHICH WOULD BE ISSUED EVERY APRIL TO OWNERS OF PREMISES POTENTIALLY LIABLE TO TAX.

SINCE THE AMOUNT OF PROPERTY INCOME RECEIVED IN ANY YEAR OF ASSESSMENT COULD NOT BE KNOWN WITH CERTAINTY UNTIL AFTER THE YEAR ENDED, THE AMOUNT OF PROPERTY TAX CHARGED WOULD BE ASSESSED ON A PROVISIONAL BASIS, MR LADD SAID.

+ACCORDINGLY. DURING EACH YEAR OF ASSESSMENT AND COMMENCING WITH THE CURRENT YEAR 1983/84, PROVISIONAL PROPERTY TAX WILL FIRST BE DEMANDED, HE ADDED.

ON RECEIPT OF THE TAX RETURN IN THE FOLLOWING YEAR, FINAL AMOUNT OF TAX WOULD BE ASSESSED.

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/+ANY TAX