Valuers expressed opinions in favour of valuing upon the basis of rental, and not of capital or selling value. Mr. Cross of Manchester stated, that "to assess land from which very little or no annual rent is derived, upon its dormant or undeveloped value, would be the introduction of a new principle in rating, viz., the assessment of unproductive capital."

It has already been shown that one of the reasons urged for the special assessment of site values to local rates is the desire to obtain from the freeholder some contribution in respect of any increase in the value of his reversion.

Mr. Costelloe said, "I should put the burden upon him Costelloe, 20,381-20,394. Rickman, 21,197.

Rickman, 21,198.

Cross, 21,594, 21.608, 21,732-6, and Vol. IV. of Min. of Ev., App. No. IV., par. 19. F. W. Hunt, 22,571, and Vol. IV. of Min. of Ev., App. No. VIII., par. 1. Mathews, 22,096, and Vol. IV. of Min, of Ev., App. No. VI. pars. xiii., xvi. (3).

(the reversioner) before it falls in possession, because I would insist, if I may, upon taking account of his values which are capital values, as well as of his income values."

But Mr. Costelloe did not think that this would be sufficient to secure from the owner a proper contribution in respect of the increase in the value or the reversion when it falls in, and he suggested, in addition, the imposition of a Municipal death duty on immovable property to secure this.

Mr. Costelloe said : "But it seems to me, if I may say so, that the drift of these questions is to suggest exactly what I suggested myself, namely, that no system by assessing a site value's contribution exclusively upon annual value will exhaust the subject. I myself quite agree that in order to exhaust the subject, and do something like economic justice, you want something in the nature of a Municipal death duty as well. I do not press that expressly at the present moment, partly because the Council has not resolved upon it, partly because I see myself perfectly well that we are not likely to have a new Death Duties Bill within the next few sessions of Parliament. But, upon the theoretic question, I quite agree, that, in order to complete the contribution of site value, you want a capital charge as well as an annual value."

And again he said: - "At the time of this discussion in November, 1892, and throughout the whole of these proceedings I, and I think most members of the Council who are thinking about this matter, have been of opinion that ultimately it is necessary to bear in mind taxation upon capital values, as well as taxation upon revenue, if you are really going to make a full and fair share of the public burden fall upon the owners of site values. Without desiring at the present moment - because, of course, I have no explicit mandate from the Council on the subject at this moment - to propose anything expressly, I should wish to say that the possibility of a Municipal death duty cannot, in my opinion, be left out of the account as an element in an ultimate scheme; that is to say, I do not believe that you will be able to get, or even that it will be expedient, to press for so full a contribution in the way of a tax on revenue from owners of site values, as would really do justice between them and the occupiers. I put it to myself in this way - that the total building estate called London rises in value, practically, with every year, and that when successions fall in, say once in every 20 years, it is demonstrable that that building estate has very largely increased in pure site value in the interval."

Rickman, 21,161-87, 21,197-205, 21,224-6, and Vol. IV. of Min. of Ev., App. No. II., par. 30.

Costelloe, 20.347-63.




Costelloe, 20,098-9. See also Lord Farrer, Parliamentary Paper C. 9528 of 1899, p. 78.


19.993-7, 20,045,

20,163, 20,177, and Vol. IV. of Min. of Ev., App. No. XI. pars. 44, 57.

On the other hand, Sir A. De Bock Porter strongly dissented from the suggestion of the imposition of a Municipal death duty. It would, he said, result in the land being taxed twice over, and he observes that, "A Municipal death duty in respect of the 'unearned increment' appears to be wrong in principle. The same objection applies as to the Municipalisation instead of the Nationalisation of site values. But, apart from this, the payment of Government death duties involves a subtraction from the capital of the parties concerned, the income on which thereafter ceases to pay income tax. But there would be no such subtraction from capital value in the case of a Municipal death duty, for it is not proposed (even if it were practicable) to tax the property on a lower value after the duty is paid. A further consideration is, that the loss would fall for the most part on the owners at the time the tax was imposed, for rateable property would be at once depreciated relatively to other property."

Mr. Sargant also pointed out the difficulties of such a proposal. He said: - "Municipal death duties have been suggested or hinted at, particularly as a means of taxing reversions. In the absence of a definite scheme it is impossible to deal effectively with the subject. But I see very great difficulties in the way. The whole present value of every house is rated as it is. You cannot impose an extra or special tax on reversions without putting extra taxation on house A., which is let on a ground lease, shortly about to expire, as compared with house B., which is owned by a fee simple owner subject to no ground lease. This, of course, would be inadmissible. Two houses of equal value must contribute equally, though the interests in them are divided differently. But then Municipal death duties would merely seem to me occasional rating in large amounts at comparatively long periods determined by death, in addition to, or in lieu of, part of the present annual rating."

De Bock Porter, 22,803-6.

De Bock Porter, Vol. IV. of Min, of Ev., App. No. IX., par. 18.

Sargant, Vol. IV. of Min. of Ev., App. No. XL, par. 22.

Several witnesses who were opposed to direct rating of site values, thought that possibly some system might be devised of obtaining some contribution to local rates in respect of the increased value of a reversion when it fell in.

Sir A. De Bock Porter, however, considered that a special tax imposed at the expiration of a lease, regardless of the circumstances, would be most inequitable.

Mr. Rickman said: - "It has been generally understood that rates are levied on income, or use equivalent to income, derived from premises, but, if the capital value is to be assessed, it would seem reasonable only to charge it on such occasions, as, in the natural course of events, increase in value, in the form of an actual money receipt, is brought about. Such sums are received from time to time in the form of premium as changes in the terms of tenancy occur, or the sale of the reversion is made, sometimes voluntarily, sometimes under special powers. Such occurrences mostly take place, irrespective of the death of the owner, consequently a 'death duty' as commonly understood, would not meet the case."

Mr. Sabin, of the firm of Smith, Gore & Co., said : - "I cannot bring myself to see any method of rating a reversion." ..."I do not see how you are to rate the unearned increment except when the unearned increment is in hand to be rated."

Rickman, 21,206-16, 21,216-23. Sabin, 21,440. Cross, 21,672.

De Bock Porter, 22,803-4.

Rickman, Vol. IV. of Min. of Ev., App. No. II., par. 30.

Sabin, 21,429-40, and Vol. IV. of Min. of Ev , App. No. III., pars. 10, 11.