XN000022-1987-01-16 — Page 3

FRIDAY, JANUARY 16, 1987

ABOLITION OF RATES RELIEF SCHEME PROPOSED

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A BILL WHICH PROPOSES TO ABOLISH THE RATES RELIEF SCHEME FROM APRIL 1 THIS YEAR WAS PUBLISHED IN THE GAZETTE TODAY (FRIDAY).

THE RATING (AMENDMENT) BILL 1987 ALSO INCLUDES A NUMBER OF OTHER, MINOR AMENDMENTS TO THE RATING ORDINANCE.

COMMENTING ON THE PROPOSALS, A GOVERNMENT SPOKESMAN EXPLAINED THAT RATES ARE CALCULATED BY APPLYING THE RATES PERCENTAGE CHARGE, AS PRESCRIBED BY THE LEGISLATIVE COUNCIL, TO THE RATEABLE VALUE WHICH IS THE ESTIMATED ANNUAL RENTAL VALUE OF EACH PROPERTY ASSESSED TO RATES.

AS THE PRESCRIBED PERCENTAGE IS CURRENTLY ONLY SIX PER CENT, RATES GENERALLY CONSTITUTE A VERY SMALL ELEMENT IN MOST TENANTS' OVERALL RENTALS.

FURTHERMORE, AS THE CURRENT RATES RELIEF SCHEME GENERALLY RESTRICTS INCREASES IN RATES TO 20 PER CENT OVER THE AMOUNT PAYABLE IN THE PREVIOUS YEAR, THE RATES FOR ANY PROPERTY SUBJECT TO RELIEF WILL BE LESS THAN SIX PER CENT OF THE RATEABLE VALUE.

THE RATING AND VALUATION DEPARTMENT HAS ALREADY STARTED WORK ON A GENERAL REVALUATION TO TAKE EFFECT ON APRIL 1, 1988.

THE MAIN PURPOSE OF CONDUCTING REVALUATIONS IS TO RE-DISTRIBUTE THE RATES BURDEN ACCORDING TO UP-TO-DATE RENTAL VALUES.

THE CURRENT RATES RELIEF SCHEME WAS INTRODUCED IN 1984 IN ORDER TO PHASE IN CHANGES IN THE RATES BURDEN FOR RATEPAYERS WHO EXPERIENCED ABOVE AVERAGE INCREASES IN THE RATEABLE VALUES OF THE IR PROPERTIES AS A RESULT OF THE GENERAL REVALUATION IN THAT YEAR.

THE PURPOSE OF THE RATES RELIEF SCHEME HAS NOW BEEN LARGELY ACHIEVED BECAUSE ONLY 7.3 PER CENT OF ALL RATED PROPERTIES WOULD BE SUBJECT TO RELIEF IN 1987-88 IF THE SCHEME WERE TO CONTINUE.

HOWEVER, ALTHOUGH THE NUMBER OF THESE PROPERTIES WILL CONTINUE TO DECLINE, SEVERAL WILL CONTINUE TO OBTAIN RATE RELIEF FOR MANY YEARS UNLESS THE SCHEME IS ABOLISHED,

AS THE RATEPAYERS OF THESE REMAINING PROPERTIES WILL BE BEARING LESS THAN THEIR FAIR SHARE OF THE RATES BURDEN, THE OBJECT OF CARRYING OUT THE REVALUATION WILL TO SOME EXTENT BE DEFEATED.

/THE PROPOSED