Pretoria – Municipalities countrywide are making
preparations for the next large-scale property valuation, which could impact
property owners’ pockets.
This is according to Ben Espach, valuations director at
Rates Watch.
The lifespan of the initial valuation rolls in terms of the
Municipal Property Rates Act is nearing at close. The rolls have to be adjusted
every five years, which period can be extended by one year.
Espach explains that although the act came into force in
2006, most municipalities drew up their valuation rolls between 2007 and 2009.
This was the first time that both land and improvements were
taken into account and farm land was included on a broad scale, ignoring the
former sliding scale.
Cape Town is already using a second roll, but most other
municipalities, including Johannesburg, Ekurhuleni, Tshwane, Nelson Mandela Bay
and Mangaung will only compile a new one next year. eThekwini is starting to
use a new roll this year.
Municipalities begin preparations at least a year ahead of
time. Tshwane’s valuations start in February so that they can be published for
comment in January next year. Johannesburg’s tenders for the valuation work
closed late last year.
Espach advises property owners to establish what the
schedule is for the municipality in which their properties are situated.
Statutorily the authority concerned must inform the owner of
the new valuation, but Espach says this does not always happen. If the
permissible period has expired without an owner registering an objection, it
becomes more difficult to correct faulty valuations and an owner could for the
next five or six years be saddled with a high rates account.
Many property owners received a severe shock in the previous
round, says Espach. Many municipalities appointed new assessors who did not
know the area and many mistakes ensued.
Espach recounts the story of a group of houses in
Johannesburg each valued between R6m and R8m. Following appeal, every valuation
was reduced to around R3m.
In another case the valuation of a shopping centre was
reduced by the appeal board from R555m to R323m by the appeal board. Some of
these issues are still outstanding.
If, after an objection, a valuation is adjusted by more than
10%, the law determines that it must be reviewed by the appeal court. None of
Johannesburg’s reviews have yet been finalised.
Espach says that if a municipality re-appoints the same
assessor, there should be fewer errors. The list will in effect merely be
refined because the assessor knows the properties.
He says that although the market was flourishing at the time
of the previous valuations, property values have in general since moved
sideways rather than falling. He therefore expects little change in valuations,
except where there has been exceptional growth in a specific area.
However a fair number of properties were undervalued, to
which no owners would have objected. He mentions the example of various hotels
in certain metros. Should the assessors correct these now, owners can expect
heavy accounts.
Also, owners should be alert to where municipal boundaries
have changed, he says. Tshwane’s valuations were generally conservative, for
instance, while those in the neighbouring Nokeng tsa Taemane were more
market-related. These two municipal areas have merged and will now be treaded
alike.
Espach says the dates on which the valuation rolls are made
available are usually indicated on that council’s web page.
The law allows a minimum of 30 days for objections, but many
municipalities extend this to 60 or 90 days.
His advice to objectors is to complete the forms
assiduously, giving logical reasons for the assessor to adjust the valuation.
To this end the owner can refer to comparative sales in the same area.
“If you have doubts, it’s better to call in the help of an
expert.”
- Sake24
For more business news in Afrikaans, go to Sake24.com.
Article source: http://www.fin24.com/Companies/Property/New-valuations-could-involve-rates-shock-20120115
