Developers have also warned of a "wave" of people "disillusioned" by the rising charges taking their money to other jurisdictions, on the fifth day of hearings into the impact of commercial rates hikes.

Valuer Stephen Flannery, who was part-owner of a Braddon building that had to be sold after the owners were hit with five years' worth of rate bills in one go and were given 28 days to pay, told the ACT Assembly's Public Accounts Committee the way the system classified land as rural, commercial or residential was "way too simplistic".

"Unless a property is 100 per cent residential or rural it’s deemed to be commercial," Mr Flannery said.

That's becoming more of a problem in Canberra, as the government seeks to encourage more mixed-use properties to come online.

Unlike other states, the ACT has no system of apportionment, in which the percentage of the land that is being used for each category is taken into account.

The Australian Property Institute previously told the committee the ACT's approach was "inequitable and discourages mixed-use development".

Evri Group, who told the committee the government has effectively forcing them to develop a property into a mixed-use development in order to realise the $24 million valuation it gave them, have also called for rates to be apportioned, instead of assessing the entire developable gross floor area on one category.

Colliers International state chief executive Paul Powderly said the "elephant in the room" was the fact the Valuation Office was raising the value of commercial land because its highest and best use had become residential, only to then apply a commercial rating factor to it, which is four times higher.

"I’ve seen people’s rates bills go from $300,000 to $1.8 million just because we’ve changed the way [we apply rates] ... we apply the commercial rate on the dollar but we’ve used the residential value to get the highest value of the rate. That’s not on," Mr Powderly said.

"Let's make the system a little more transparent and equitable so people can see if their value is $80 million because [if] it’s based on all this residential units then they should be paying $80 million on a residential site, not on it being a commercial site worth $80 million."

Mr Powderly also suggested that "if you can’t access the development rights, you shouldn’t necessarily be paying rates on them", referring to cases where the best and highest use of the land had changed, but the land owner could not unlock it because they had leases in place.

The committee was also warned of the chilling effect the increased charges would have on investment in the city.

Peter Sarris said his family has been in property in Canberra for 55 years and he felt they were being "pushed out".

His rural block at Pialligo was reclassified as commercial once he put in an application to vary the lease to allow a vet hospital, taking its rates bill from $13,000 a year to $44,000.

He also owns a stake in 220 Northbourne, and its increase from $100,000 to $1.4 million in rates made him lose sleep for "many a night".

"The wave is coming, in my opinion, where you'll see people disillusioned with how erratic these values are," he said.

“Every hundred thousand dollars of rates equates to a million, million-and-a-half off the valuation.

"There’s nothing investors like more than certainty and when you just throw up 1400 per cent increases at a whim … I just think that invokes a lack of confidence."

Mr Sarris said the abolition of stamp duty on commercial properties worth less than $1.5 million was cold comfort.

"These guys already own the property. The fact is the rates equal stamp duty year-on-year, and no other jurisdiction I know is even close to that," Mr Sarris said.

Mr Powderly said the rating system needed to be able to respond to external influences, singling out the Coalition government's decentralisation agenda as another threat.

“I think we need to be very careful that the nation’s capital is here for one reason - to really serve Parliament - and we need to make sure we’ve got the most cost effective office market in Australia so that we don’t have this conversation about decentralisation and Canberra is seen to be the most competitive and we do take departments from Sydney and Melbourne to Canberra because that’s really what we want," he said.

The committee also returned to the question of whether the ACT Valuation Office should be made independent.

Previous hearings were told the office was only brought in-house when the Commonwealth valuation office shut down (Mr Powderly revealed he had a hand in bringing those valuers into the ACT government "rightly or wrongly" as part of his previous role as Australian Property Institute president).

But Clayton Utz partner Alfonso Del Rio, a "reluctant" witness called upon to give evidence in a personal capacity because of his experience dealing in these matters, said he had serious misgivings about the arrangement.

“Purely from a governance perspective, the fact you have one body that reports purely to the person that is there to raise the revenue I see as [a matter] of fundamental concern," Mr Del Rio said.

Mr Powderly suggested the issues could be resolved by making it easier to dispute property valuations, rather than splitting the Valuation Office away from Treasury.

"Having to go to ACAT and the Supreme Court is not a cost-effective way to deal with small discrepancies and differences of opinion in annual rating matters," Mr Powderly said.