Provision for the rating and taxing of land was made from the earliest days of organised European settlement in New Zealand. Thus there was the Property Rate Ordinance of 1844 which introduced a tax both on property and on income (repealed the following year and replaced by a new Customs tariff), the Municipal Corporations Ordinance of 1844 (providing for rating in boroughs), the Stamp Duties Act of 1866 (stamp and death duties), and the many Ordinances under the provincial administrations which provided for the establishment and regulation of units of local government, together with their ancillary revenue-raising powers.
With the abolition of provincial government in 1876, local government entered upon an entirely new phase, and the Municipal Corporations Act, the Counties Act, and the Rating Act (all of that year) were necessary to give expression to the new order. Land tax was reimposed in 1878, followed a year later by a property tax on real and personal property.
Before these rates and taxes could be imposed, the land needed to be valued, and for this purpose valuers were appointed by the Taxation Commissioner and the individual local authorities, all acting quite independently, to prepare the necessary valuation rolls. But in 1882 rationalisation took place to the extent that local authorities rating on the capital value had to obtain their rolls from the Commissioner, with the option of using, if they wished, the capital values assessed thereon. In this latter event the local authorities had some limited powers as regards keeping the rolls up to date.
In 1882, therefore, there were four kinds of valuation rolls in existence, viz.:
The rolls prepared by those boroughs which still rated on the annual (or rental) value;
The Property Tax Commissioner's rolls showing capital values;
Local authority rolls obtained from the Commissioner – complete as to capital values, but maintained by local authority;
Local authority rolls obtained from the Commissioner, but where capital values were assessed by valuers appointed by the local authority. On these rolls, land acquired from the Crown was to be assessed at the price paid, and the values for properties owned by the Crown and Maoris were to be fixed by the Commissioner. In 1893, however, local authorities were again made independent of the Property Tax Commissioner and were permitted to stand on their own feet in compiling their valuation rolls. Three years later, in 1896, the Rating on Unimproved Value Act was passed providing for a further rating system, this to be adopted by a poll of the ratepayers.
By this time the Government Advances to Settlers Act was in operation and valuations were required by the State in those cases where application had been made for an advance on mortgage. Thus it could be said with truth that frequently a property would have at least three valuations assigned to it – for taxation, for rating, and for loan purposes. When one has regard to the shortage of skilled valuers of that time, it is little wonder that there must have been considerable discrepancies and more than a little foundation for allegations that values were set high or low according to the purpose for which the authorities would regard the properties.
In 1896, therefore, the rationalisation of 14 years earlier was advanced by the Government Valuation of Land Act which provided for the appointment of a Valuer-General (to be the Commissioner of Taxes for the time being) who would have the statutory duty of preparing, maintaining, and revising periodically a general valuation roll for the colony showing for each property three sets of values, capital value, unimproved value, and value of improvements. The general valuation roll would be the standard roll on which the valuation rolls of all local authorities rating on the capital value or unimproved value were to be framed. The valuations for the time being appearing in the general valuation roll were also, in so far as the Governor in Council from time to time directed, to be used for:
The assessment of land tax and of stamp and death duties;
Advances and investment on mortgage of land by or on behalf of, inter alia, the Government Insurance Office, the Public Trust Office, and the Government Advances to Settlers Office.
Provision was also made in this parent statute that, where land was taken or acquired for settlement purposes or for public works, the sum to be offered by way of compensation was to be not less than the valuation of the land appearing on the general valuation roll. Further, a certified copy of any entry was to be deemed to be a competent valuer's report for the protection of any trustee proposing to lend money upon the security of the land.
Capital value was defined as the sum which the owner's estate or interest in the land, if unencumbered by any mortgage, might be expected to realise if offered for sale at the time of valuation (i.e., fair market value), and unimproved value was defined as the market value of the land as if no improvements had been effected. The value of improvements was to be the added value given by the improvements. There has been no change in these definitions over the whole of the Valuation Department's history.
Local authorities rating on the annual value were still left to prepare their own rolls, and it was not until 1954 that the Valuer-General was vested with statutory power to accept appointment as a local authority valuer for this purpose. In the meantime, however, there had been a big drop in the popularity of annual value as a rating system in boroughs (from 60 per cent of boroughs and cities using the system in 1904, when figures are first available, to 10 per cent at 31 March 1961).
The Public Officers' Appointment and Powers Act of 1904 separated the offices of Valuer-General and of Commissioner of Taxes. The Valuer-General there-upon became an autonomous officer of the State.
Over the years there have naturally been some changes, but in essentials, the Valuation Department remains an independent authority whose valuations are used for a wide variety of public and private purposes. On the one hand, the State Advances Corporation now employs its own field staffs; many valuations, formerly made for the Lands and Survey Department, are today undertaken by that Department's staff. On the other hand, increasing demands are being made by other Government Departments and quasi-Government agencies on this Department's specialised knowledge in the fields of land utilisation and land economics. Today it is being called upon to supply special valuations (approximately 14,000 per annum) for use in connection with a big sector of Government activity. On the part of the public, too, there has been an ever-increasing reliance upon Government valuations.
The general revaluations of district valuation rolls is proceeding continuously, individual districts being revalued at not more than five-yearly intervals, and the rolls are kept up to date in respect of subdivisions of land, new and altered buildings, and changes in ownership or occupancy. By 31 March 1965 there were a total of 913,000 separate properties on the rolls with a gross capital value of £4,230 million. For the year ending 31 March 1965 valuations were made of 33,000 new and altered buildings; 30,000 new sections were assessed, and roll alterations totalled 231,000.
All valuations for roll purposes are issued subject to the right of objection, any such cases are referred to the District Valuers for checking, followed, if necessary, by discussion with the property owner. Land Valuation Committees, constituted under the Land Valuation Court Act of 1948, deal with that small proportion of objections where agreement is not eventually reached. The decisions of these committees are subject to an appeal to the Land Valuation Court.
The Valuers Act of 1948 provided for the registration of valuers and set up a registration board for that purpose, the Valuer-General being chairman. By 31 December 1964 there were 327 registered rural valuers, 360 registered urban valuers, and 55 holding the dual qualification.
by John Stuart Hector Robertson, B.COM., Senior Executive Officer, Valuation Department, Wellington.