This Act may be cited as the Land and Income Assessment Act, 1907, and shall be read together with and deemed to form part of the Land and Income Assessment Act, 1900 (hereinafter referred to as the principal Act).

In this Act, unless a contrary intention appears from the context or subject-matter,—

Sections forty-four and forty-five of the principal Act, section five of the Land and Income Assessment Act Amendment Act, 1903, and the Schedule to the last-mentioned Act are hereby repealed; but all land-tax for any period prior to the year commencing on the first day of April, nineteen hundred and seven, shall continue to be assessed, levied, paid, and recovered as if the said sections and Schedule had not been repealed.

Every person shall be liable to pay in each year, commencing with the year ending on the thirty-first day of March, nineteen hundred and eight, graduated land-tax at the rate hereinafter set forth on all land of which he was the owner at noon on the thirty-first day of March in the preceding year, and the unimproved value of which is five thousand pounds or more.

The provisions of this section are subject to any exemptions from graduated land-tax created by the principal Act.

If the unimproved value of the said land is not less than five thousand pounds but is less than forty thousand pounds, the rate of graduated land-tax payable in respect thereof shall be in accordance with the Schedule hereto.

If the unimproved value of the said land is not less than forty thousand pounds, the rate of graduated land-tax shall be a percentage determined in accordance with the provisions hereinafter contained of the said unimproved value.

If the unimproved value of the said land is not less than forty thousand pounds but is less than forty-one thousand pounds, the said percentage shall be eight shillings for every hundred pounds of the said value.

For every additional thousand pounds of the said value over the amount of forty thousand pounds, the said percentage shall be increased by one-fifth of a shilling, and the percentage so increased shall be charged on the total unimproved value of the land in respect of which the said tax is assessed.

Notwithstanding the provisions hereinbefore contained for a progressive increase, the said percentage shall reach its maximum in the case of land of which the unimproved value is two hundred thousand pounds; and in this case, and in all cases in which the unimproved value exceeds two hundred thousand pounds, the said percentage shall be two pounds for every hundred pounds of the total unimproved value.

Notwithstanding anything hereinbefore contained, each of the said percentages determined as aforesaid shall be increased by twenty-five per centum thereof in the case of all land other than business premises as herein defined.

The term “business premises” means any piece of land included within the area of a building used for business purposes, together with such additional land as immediately adjoins the said building, and is used and occupied in connection therewith, and does not exceed in extent the area of the building itself.

A building shall be deemed to be used for business purposes within the meaning of this section if it is exclusively or principally used, whether by the owner or by any occupier or occupiers, for the purposes of any business, trade, or industry.

When the same person is the owner both of business premises and of other land, graduated land-tax shall be assessed in respect of the whole of such business premises and other land without the said increase of twenty-five per centum, and the said increase shall then be calculated only on the amount of graduated land-tax that would be payable by him if he were not the owner of the business premises.

Nothing in this section contained shall affect the rate of graduated land-tax payable in accordance with the Schedule hereto.

This section shall commence to take effect with respect to the graduated land-tax payable for the year ending on the thirty-first day of March, nineteen hundred and ten.

Notwithstanding anything hereinbefore contained, every taxpayer who on the thirty-first day of March in any year is an absentee within the meaning of this section shall be assessed and liable for graduated land-tax at a rate greater by fifty per centum than the rate at which he would have been assessed independently of this section.

Every person shall be deemed to be an absentee for the purposes of this section unless he has been personally present in New Zealand for at least one-half of the period of four years immediately preceding the year in and for which he is assessed for graduated land-tax:

Provided that no person who has acquired all his land in New Zealand within the said period of four years shall be deemed to be an absentee if he has been personally present in New Zealand for at least one-half of the period which has elapsed between the time when he first acquired any of that land and the commencement of the year in and for which he is assessed for graduated land-tax.

If an absentee taxpayer is liable to be assessed for graduated land-tax jointly with any other taxpayer who is not an absentee, they shall be assessed and liable jointly as if neither was an absentee, and the absentee taxpayer shall also be separately assessed and liable in accordance with the provisions of section thirteen hereof for the additional tax imposed by this section.

This section shall not apply to companies, but shall apply to shareholders in companies in accordance with the provisions of section eleven of this Act.

The owner of any life estate or of any other freehold estate less than the fee-simple shall be deemed for the purposes of this Act to be the owner of the fee-simple to the exclusion of any person entitled in reversion or remainder, and shall be assessed and liable for graduated land-tax accordingly.

Any person owning any leasehold estate in land, whether legal or equitable, shall be deemed for the purposes of this Act (though not to the exclusion of the liability of any other person) to be the owner of the fee-simple of the land, and shall be assessed and liable for graduated land-tax accordingly.

In the case of the owner of a leasehold estate in land there shall be deducted from the amount of graduated land-tax so payable by him in respect of that land (so far as it exceeds the graduated land-tax, if any, that would be payable by him in respect of the value of his leasehold estate independently of this section) the amount of graduated land-tax (if any) payable in respect of that land by the owner of any freehold estate or of any precedent leasehold estate in the said land or any part thereof.

The provisions of this section shall not apply to leasehold estates in any business premises as hereinbefore defined, or in any land of the Crown, or in any Native land, or in any land vested in any person who in respect thereof is wholly exempted from land-tax both ordinary and graduated.

The provisions of this section shall not apply to any leasehold estate existing at the time of the passing of this Act, unless the owner of such leasehold estate or his predecessor in title has been at any time within five years next before the passing of this Act the owner at law or in equity of a freehold estate in the land which is subject to such lease.

For the purposes of this Act all land owned by a company shall be deemed (though not to the exclusion of the liability of the company or of any other persons) to be owned in common by the shareholders of that company in the proportions which their interests in the paid-up capital of the company bear to the total paid-up capital, and the said shareholders shall be individually assessed and liable for graduated land-tax accordingly in manner provided by subsections three and four of section thirteen hereof, and shall be entitled to the same deduction as is therein provided.

The term “shareholder” shall for the purposes of this and the next succeeding section include all persons on whose behalf a share in the company is held by a trustee or by any other person.

The provisions of this section shall extend to all land which is deemed to be owned by a company under any of the provisions of this Act.

If two or more companies consist substantially of the same shareholders, these companies shall be deemed for the purposes of the graduated land-tax to be a single company, and shall be jointly assessed and liable accordingly, with such rights of contribution or indemnity between themselves as shall be just.

For the purposes of this section two companies shall be deemed to consist substantially of the same shareholders if not less than three-fourths of the paid-up capital of each of them is held by or on behalf of shareholders in the other. Shares in one company held by or on behalf of another company shall for this purpose be deemed to be held by shareholders in the last-mentioned company.

Whenever two or more persons (hereinafter called joint owners) own land jointly or in common, whether as partners or otherwise, they shall be assessed and liable for graduated land-tax in accordance with the provisions of this section.

The joint owners shall be jointly assessed and liable in respect of the land so owned by them jointly or in common (hereinafter called the joint estate) as if it was owned by a single person, without regard to their respective interests in the same, and without taking into account any land owned by any one of them in severalty, or jointly or in common with any other person.

Each joint owner shall in addition be assessed and liable in respect of his individual interest in the joint estate together with any other land owned by him in severalty and with his individual interests in any other land.

In the case of each joint owner there shall be deducted from the tax so payable by him under the provisions of the last preceding subsection (so far as such tax exceeds the graduated land-tax that would be payable by him if he owned no interest in any joint estate) his share of the tax so payable in respect of the joint estate.

The share of a joint owner in the tax so payable in respect of the joint estate shall bear the same proportion to the amount of that tax as his interest in the joint estate bears to the whole value of that estate.

When two or more persons own land in severalty but occupy it jointly, whether as partners or on joint account or otherwise, the same graduated land-tax shall be payable by them and by each of them as if they owned the whole of the said land jointly, in the proportions which the unimproved values of the lands so severally owned bear to one another, and for the purposes of this Act they shall be deemed to be joint owners of the said lands accordingly.

Without limiting in any way the meaning of the term “joint occupation,” two or more persons shall be deemed to occupy lands jointly within the meaning of this section if those lands are occupied, worked, or managed by any one or more of such persons on behalf of all of them or on a joint account, or if those lands are occupied, worked, or managed by any other person as trustee for or otherwise on behalf of all of those persons.

When any agreement has been made for the sale of land, whether before or after the passing of this Act, the buyer shall be deemed to be the owner of the land for the purposes of this Act (though not to the exclusion of the liability of any other person) so soon as he has obtained possession of the land so purchased, whether the agreement has been completed by conveyance or not.

When any agreement has been made for the sale of land, whether before or after the passing of this Act, and whether the same has been completed by conveyance or not, the seller shall be deemed to remain the owner of the land for the purposes of this Act (though not to the exclusion of the liability of any other person) until possession of the land has been delivered to the purchaser and at least fifteen per centum of the purchase-money has been paid:

Provided that in any case in which possession has been so delivered, but less than fifteen per centum of the purchase-money has been paid, it shall be lawful for the Commissioner of Taxes to exempt the seller from the provisions of this section, if such Commissioner is satisfied that the said agreement for sale has been made in good faith, and not for the purpose of evading the payment of graduated land-tax, and that the said agreement is still in force. In any such case the decision of the Commissioner shall be final and conclusive.

In estimating the amount of purchase-money which has been so paid, all money owing by the purchaser to the seller and secured by any mortgage or other charge on the land, and all money lent to the purchaser by the seller, and all money owing by the purchaser to any other person, and directly or indirectly guaranteed by the seller, shall be deemed to be unpaid purchase-money.

When by virtue of this and the last preceding section the buyer and seller of land are both liable for graduated land-tax in respect thereof, there shall be deducted from the tax so payable by the seller in respect of the said land the amount of the said tax payable in respect thereof by the buyer.

Nothing in this section shall apply—

No conveyance, transfer, declaration of trust, settlement, or other disposition of land, whether made before or after the passing of this Act, shall be effective so as to exempt the person making the same, so long as he remains or is in possession or in receipt of the rents or profits of any such land, whether on his own account or on account of any other person, from any graduated land-tax which would have become payable in respect of such land had no such conveyance, transfer, declaration of trust, settlement, or other disposition taken place; and for the purposes of this Act the person so making the same shall, while he remains or is so in possession of the land or in receipt of the rents or profits thereof, be deemed (though not to the exclusion of the liability of any other person) the owner of the said land.

Subject to the other provisions of this Act, the owner of any equitable estate or interest in land shall be assessed and liable in respect of graduated land-tax as if the estate or interest so owned by him were legal, but there shall be deducted from the said tax so payable by him in respect of that estate or interest the amount of any graduated land-tax paid in respect thereof by the legal owner of the land.

Any person in whom land is vested as a trustee, executor, or administrator shall be assessed and liable in respect of the graduated land-tax as if he were beneficially entitled to such land, save that when he is the owner of different lands in severalty in trust for different beneficial owners, who are not, by reason or joint occupation or otherwise, liable to be jointly assessed for graduated land-tax in respect of the same, the said tax so payable by him shall be separately calculated and assessed in respect of each of those lands; and save also that when a trustee is also the beneficial owner of other land, he shall be separately assessed in respect of that land, and of the land of which he is a trustee, unless by reason of joint occupancy or for any other reason he is liable to be jointly assessed independently of this section.

Notwithstanding anything in this section, a trustee, executor, or administrator may be assessed for graduated land-tax in respect of the interest of any beneficiary in the land owned by the trustee, executor, or administrator at the rate at which the beneficiary himself is liable to be assessed, when by reason of the ownership of other land or for any other reason the beneficiary is liable to be assessed at a higher rate than that at which the trustee, executor, or administrator would be assessed independently of this section.

Section three of the principal Act is hereby amended by omitting from the proviso to the definition of “owner” the words “of assessing the rate of graduated tax or.”

For the purposes of the graduated land-tax, no deduction from the unimproved value of the land shall be allowed in respect of any mortgage or other charge to which the said land is subject, or in respect of any unpaid purchase-money, and a mortgagor shall be assessed and liable for the said tax as if he were the legal owner of an unincumbered estate.

No mortgagee or other person owning any legal or equitable estate or interest in any land by way of security for money shall be liable to pay graduated land-tax in respect of that mortgage or other estate or interest.

Nothing in this section contained shall affect the provisions of section seventy-eight or section eighty-one of the principal Act, but the owner of a mortgage existing at the time of the passing of this Act shall not become liable under the provisions of those sections to pay any greater sum than he would have been liable to pay if this Act had not been passed.

Notwithstanding anything in this section contained, any mortgagee in possession of land or any other person who is in possession of land by way of a security for money shall be deemed for the purposes of this Act, so long as such possession continues (though not to the exclusion of the liability of any other person), to be the beneficial owner of the estate or interest which is subject to such mortgage or other security, and shall be liable for graduated land-tax accordingly; but there shall be deducted from the tax so payable by him the amount of graduated land-tax (if any) paid in respect of such estate or interest by the mortgagor or other owner thereof.

No land-tax, whether ordinary or graduated, shall be assessed or payable in respect of the value of any minerals, timber, or flax; and for the purpose of any such tax the value of minerals, timber, or flax shall not be taken into account in estimating the value of the land.

The term “minerals” means all minerals, metals, coal, oil, gum, clay, stone, gravel, sand, or precious stones existing on or beneath the surface of the land.

All income derived by any person from or by reason of the extraction, removal, sale, or treatment of minerals, timber, or flax, whether by the owner of the land or by any other person, and whether the said income is derived by way of rent, royalties, commercial profit, or otherwise howsoever, shall, so far as it is derived from or received in New Zealand, be deemed to be income derived from business within the meaning of section fifty-nine of the principal Act, and income-tax shall be assessed and payable thereon accordingly.

Nothing in this section contained shall affect the liability of any person to pay land-tax in respect of a mortgage.

This section shall commence to take effect in respect of land-tax and income-tax payable for the year commencing on the first day of April, nineteen hundred and seven.

Notwithstanding anything contained in this section, if the Commissioner is of opinion that any land containing minerals or having standing timber or flax thereon is not being worked and used in good faith and to an adequate extent for the purpose of extracting the said minerals or of cutting the said timber or flax, such minerals, timber, or flax shall be excluded from the provisions of this section, and land-tax, both ordinary and graduated, shall be assessed and payable accordingly in respect of the value of such minerals, timber, or flax as if this section had not been in force.

In assessing under the provisions of this section the income derived by any taxpayer from the removal of flax or timber from any land there shall be deducted a sum equal to five per centum of the amount in respect of which the said taxpayer was last assessed for land-tax by reason of the ownership or occupation of the land used by him for the production of such income.

Section seven of the Land and Income Assessment Act Amendment Act, 1903, is hereby repealed.

No graduated land-tax shall be payable in respect of any estate or interest owned by or in trust for any Church or religious society, if the land which is subject to such estate or interest, or the rents or profits of such land, are used exclusively for religious, charitable, or educational purposes.

No institution or society shall be deemed to be a Church or religious society within the meaning of this section unless the principal purpose for which such institution or society is established is the teaching, maintenance, or advancement of religion.

This section shall commence to take effect with respect to graduated land-tax payable for the year ending on the thirty-first day of March, nineteen hundred and eight.

Section eighteen of the principal Act is hereby amended by repealing paragraphs (2) to (8), and substituting therefor the following:—

Where by reason of the non-registration of a mortgage before noon on the thirty-first day of March in any year the capital value of the mortgage is not deducted in the assessment of the mortgagor, the following provisions shall apply:—

Sections eighty-nine, ninety, and ninety-one of the principal Act are hereby repealed.

Returns of land owned at noon on the thirty-first day of March, nineteen hundred and seven, and of income derived during the year ending on that day, shall be made by every taxpayer as and when required by the Commissioner, and all returns of such land or income may be revised in accordance with this Act, and shall be subject to the provisions of this Act.

In addition to any returns required to be made under the provisions of the principal Act, every taxpayer shall, as and when required by the Commissioner, make all such returns as are deemed by the Commissioner to be necessary for the purposes of this Act.