February 2019 is the official release date for the City of Cape Town’s 2018 General Valuations roll. This frequently dreaded revision to the city’s records affects property owners by updating their monthly rates bills in proportion to their property’s current estimated market value.
For most Cape Town ratepayers, that means an inevitable increase in the cost of owning property – a bitter pill to swallow on top of the already high water, electricity and petrol prices. However, according to Schalk van der Merwe, franchisee for the Rawson Properties Helderberg Group, the release of the new General Valuations Roll this February doesn’t have to be a bad thing. In fact, it offers homeowners a rare – but important – cost-saving opportunity!
“The problem with municipal valuations is that they’re typically done at a distance,” says Van der Merwe. “It’s just not possible for the City to send someone with the right qualifications to value each and every home, individually. Instead, most properties receive what’s known as a ‘computer assisted mass appraisal’: a largely automated process that essentially ingests statistical data from the deeds office and estimates probable property values based on averages.”
Van der Merwe says these statistical or “desktop” valuations are notoriously inaccurate, because (amongst other reasons) they only take basic features like neighbourhood, erf size and the number of bedrooms, bathrooms and garages into account.
“Anyone with any experience in property can tell you those details are far from the only things that define a home’s value,” he explains. “It’s incredibly common for properties that are identical on paper to fetch very different prices on the market due to elements like condition, flow, ambiance, fittings, finishes, views and gardens.”
In addition to excluding these key elements, the City’s valuations are also prone to being skewed when recent sales in an area have been limited.
“With the suppressed property market activity that we’ve seen over the last few years, a lot of Cape Town neighbourhoods haven’t had as much property turnover as usual,” says Van der Merwe. “That gives the City a very limited sample size to use for its calculations in those areas, and increases the risk of artificially inflated averages thanks to one or two unusually high-value sales.”
As a result of these inaccuracies, Van der Merwe says it’s very common for property owners to be paying higher rates than they need to – something that’s easy to overlook if it’s been some time since you’ve had your property professionally valued.
Thankfully, the upcoming release of the new General Valuations Roll offers the perfect opportunity to address this issue by lodging an objection.
“Homeowners can only object to their municipal valuations for a finite period following the release of the latest figures,” says Van der Merwe. “Since that only happens once every three years, it’s really important to grab the opportunity with both hands.
“I’d highly recommend getting in touch with a real estate expert in your area as soon as possible, and requesting a proper property valuation and comparative market analysis to back up your objection if your updated municipal valuation is unfair.
As for what a “proper” valuation entails, Van der Merwe says a comparative analysis using properties sold at the same time the municipal valuations were conducted (June 2018) is essential.
“The city’s objection committee only accepts well-motivated objections,” he explains. “We’ve found a comparative market analysis to be the most effective way of providing this motivation. Essentially, we find properties similar to yours that sold during the valuation period, and use a combination of photographs and written explanations to show why your home would have achieved a similar sales price.”
By providing valuation services free of charge to Somerset West, Strand and Gordon’s Bay residents, Van der Merwe says Rawson Properties Helderberg has successfully saved local ratepayers many thousands of rand over the years. This year, the office has prepared in advance by collecting all pertinent sales information in detail, enabling them to streamline what has become one of their busiest periods.
“It’s a hectic but rewarding time for us – it’s great to be able to help our communities,” says Van der Merwe. “We do suggest booking a valuation early, though, to make sure we can accommodate you in good time.”
The following two tabs change content below.