But he altogether disclaims any intention of rating land only ripening for building. He says: "Until land becomes ripe for building, it would inflict hardship to assess it upon any greater value than the annual revenue which, at the time of valuation, it is capable of yielding. Such land is often called accommodation land, and is used as pleasure grounds, cricket fields, and tennis lawns, or sometimes as market gardens, and for agricultural purposes. The reasonable rent for such land, taking one year with another, less a fair percentage on the capital outlay for such temporary improvements as cricket pavilions, would be a fair basis for assessment. It is true that such land possesses a capital value greater in proportion than the annual revenue derived from it. This proportion is greater or less according to the length of time likely to elapse before the land becomes absolutely ripe for building; and the extra capital value represents the equivalent in present money of a future annual value, not now realisable. It does not seem practicable to use both annual value and capital value as bases of assessment for the same tax; and, unless the former is to be wholly dropped, there would be grave danger in adopting the latter in any special case.

Sargant, Vol. IV. of Min.of Ev., App. No. XL, par. 23. F. W. Hunt, 22,556-8, 12.561-69. De Bock Porter,

23.379. Sabin,

21,427-37. 21,454-6, 21,458-69, 21,502-5

Harper, 22,325-36, and Vol. IV. of Min.of Ev., App. No. VII., sect. 1 C. (iii.).

Harper, 22,301,

22,325-34-and Vol. IV. of Min. of Ev., App. No. VII. sect. 1 C. (ii.).

"Assume, for the sake of the argument, that an acre of land is expected to yield, 20 years hence, a ground rent of 100l. per annum. Its present capital value would be about 800l., though it might not be yielding a higher rent than 5l. per annum. Taking 4 per cent. on capital value would give an assessment of 32l., or 27l. per annum more than the land could yield under existing conditions. And as the 100l. per annum, when it arose, would, ex hypothesi, also be liable to the tax, any charge upon the 32l. assessment could only fall, by anticipation, upon the same revenue, which would thus be taxed twice over."

Mr. Harper, however, did suggest that the frontage near well-known residences or large estates should be assessed at their building value; though it may perhaps be suggested if such residences were pulled down, the parks in which they were situated ploughed up, and the trees cut down, the value of the frontage would probably not be worth more than the adjacent agricultural land.

Mr. Fletcher Moulton, on being asked if he had any definition of unoccupied land in towns which could be built over, said: "I think that any land that could be built upon within what you might call a fair margin of the town should be considered as unoccupied land. There may be certain difficulties arising in cases of towns which have a large area belonging to the urban district which includes the land round about the town; but, wherever there is a substantial addition to the annual value of land by reason of the presence of the town, I think the principle ought to apply."

Sir H. Poland said: "There is no definition of what building land is, and no satisfactory definition can be given."

Several well-known expert valuers expressed the opinion to the Royal Commission that the difficulties of distinguishing land ripe and land ripening for building would be very great.

Harper, 22,290-6.

Moulton, 23,041.

Poland, 2193, 2322, 2474.

For instance, Mr. Mathews, of Birmingham, said : "There would be great difficulty in defining what lands should be subject to it. Building value is of very gradual growth, and land at the urban limit may have a prospective building value, i.e., a purchase value much greater than its agricultural value, many years before it is ripe for building, and has an actual building value. No efforts of the owner would induce a builder to spend his capital upon it before this time, and the accumulation of a tax thereon might consume all the profit the owner may subsequently make. It might do more and force him to sell at a great disadvantage in a period of depression, when the expansion of a town may be long or permanently retarded.

"The mere imposition of such a tax would tend to induce small owners to sell without delay, and land would then be thrown into the hands of a few large capitalists, who could afford to hold and wait, and who would naturally endeavour to recoup themselves by raising the price of it when ripe for building.

"The tax would fall with equal hardship upon land ripe for building, and equipped for that purpose by the owner at a great expenditure in roads, etc., an expenditure which is not entirely productive until the whole is taken up.

"This often takes many years, as the land can only be disposed of gradually as new buildings are required.

"In this case it would be difficult to differentiate the land or site value from the owners' expenditure upon it.

"If unoccupied land is to be taxed, it must naturally follow that all unoccupied buildings which are at present exempt from taxation must be similarly charged."

Again, Mr. Sabin said: "But, further, nearly every large city tells its own tale. On its outskirts will be found tracts of land not built upon, while just beyond houses may be found. The intervening space is a source of trouble and annoyance. The owner would let or sell if he could, but the higher urban, as compared with the lower rural, rates, deter lessees and purchasers. It is not that the difference merely reduces the value, but for all practical purposes it destroys the value to lease or sell for immediate building. Or in truer and common phrase, the value is dormant until there shall be found persons who are willing to bear, not the extra rate on the ground (that will still fall on the site owner), but the extra burden on the capital invested in the houses, in exchange for the advantage of living within a municipal area. Of course, where there are valuable services rendered in respect of the difference in the rates, the illustration does not apply.

Cross, Vol. IV. of Min. of Ev., App. No. IV. par. 19. F. W. Hunt,

22,559. Wainwright, 21.898-902. Mathews, 22,166-71, and Vol. IV. of Min. of Ev., App. No. VI., par. xvi. (2), Sabin, Vol. IV. of Min. of Ev.. App. No. VI., pars. 17-21.

Mathews, Vol. IV. of Min. of Ev., App. No. VI., par. 16. See also Wainwright, Vol. IV. of Min. of Ev., App. No. V., pars. 7, 8, 9. Cross,

21,591. 21,608

Sabin, Vol. IV. of Min. of Ev.,

App. No. III., pars. 17-21.

"It will be seen that the last paragraphs vitally affect the question as to the rating of 'building land,' although here, again, a strict definition would be necessary if uniform results are to follow. It must be assumed to be land within an urban area, capable of being opened up into adequate roads, and of being drained into public sewers, and in a situation where it would attract occupiers.

"Land is not available for building until sewers and roads are formed. Such works are difficult to estimate, and are scarcely ever executed within the amount proposed. While I admit that to make an owner contribute by rate immediately he takes advantage of existing benefits, would not be unjust, I cannot admit that a rate should be laid for no benefit, in the expectation that in self-defence the owner would embark on a doubtful speculation, with a possibility of having erected houses that no one wanted, but in respect of which it is suggested by some that he should also pay rates. The enormous clearances for huge railway goods stations have done much more to produce overcrowding, than the keeping back of land from the market by obstinate owners.

"Moreover, the opening up of a building property may depend upon arrangements with other owners and other interests, to an extent that would be much more open to dispute than the estimate of the value of a completed building or a covered site.

"Nor do I think it would be to the public interest to lay it down that all land within any prescribed area was building land, and then rate it with the overt intention of forcing it into the market. Such a rate could not be confined to the Metropolis or the large towns. It must be applicable anywhere, and the power to levy it might easily result in new neighbourhoods being shut out from affording relief to congested districts, because immediately an owner set about any development for building purposes, he would be liable to be rated. Rate such an owner, immediately he, by receipt of money, takes advantage of existing benefits - and in respect of those benefits - and make the rate direct on the owner, but the raw material of unremunerative land should not be rated. However much I may desire to have my rates reduced, I should consider it a public disaster if the grounds of Holly Lodge, or Mr. Burdett Coutts' stud paddocks were forced prematurely into the market. They will be built over quite soon enough."

The other main point urged by valuers to the Royal Commission on Local Taxation was that it would be contrary to accepted principles to rate upon capital value property not producing any income. This view was supported by Mr. Sargant. The question of rating on capital value is discussed in Chapter XI.