Brian P Haratsis

Because the Rating System is rarely studied and even less rarely understood, political rating decisions are often illogical. Unfortunately the system perpetuates itself as the groups affected by illogical political decisions are unable to exercise their democratic right because they are either more ignorant of the system than the legislators or numerically and financially too weak to muster sufficient support to change the system. Differential rates used correctly may also be developed as a planning tool in discouraging certain types of development. It must be remembered however, that the cost of using differential rating to a greater extent may be higher. Commentary on the Jarvis-Gann CIV proposal, although proponents claim the average property taxation would be reduced by 64 per cent and a ceiling rise of 2 per cent in the market value of a home for tax purposes would be the desirable result, the undesired side effect is that it destroys a system of rating based on valuation. If this is what the community wishes, then it should be explicitly recognised, not lost in a heap of good intentions. Capital Improved Value as the name suggests this valuation includes all improvements to land and buildings. capital Improved Value is the market value of the whole property irrespective of encumbrances such as life tenants, uneconomic rents etc. Unfortunately C.I.V. is an unsatisfactory valuation base as it does not account for varying rates of return to similarly valued properties, for example, a homeowner does not expect a return, or rent, on his property as does an investment flat owner, shop owner, or factory owner even though similarly valued properties may use differing amounts of municipal services. p14 ..In general terms S.V. tends to favour those groups with a large expenditure on improvements to the land value (e.g. industry, investment flats and large house owners). p40 Local Government Rates in Victoria Hargreen Publishing Co.