Over the past few weeks, many residents would have received their new property valuation notice by email and/or post. If you haven’t, you should be able to view it online on the www.joburg.org.za website.
If you have received your notice, then you are most likely shocked by how much it has gone, but it is important to point out that property valuations have traditionally always been lower than the actual value. The City started to address this in 2013, in the last valuation roll, but many were still undervalued.
The standard reaction is that it is WRONG and TOO HIGH!!! While this may be the case for some households, for others it may be correct. If your valuation is too high (or too low) then objections can be made until 3pm on the 6th April 2018. Objections can be made at a Revenue Walk In Centre like Lenasia Civic Centre, but also the online portal.
The threshold for determining the rates rebates for pensioners is currently a valuation of R2 million or under. If your property valuation is now over that, don’t panic as this threshold should hopefully be adjusted in line with the increases and will probably rest R 2 500 000,00.
What is Valuation Roll?
Schindlers Attorneys fact sheet on Valuation Rolls:
• Every property is supposed to have a municipal valuation. You should see a value on your municipal statement. This is the property valuation that the municipality has ascribed to your property.
• The municipal valuation is a value ascribed to your property by the Valuations Department and is determined based on a number of factors and the precise value is calculated according to formulae determined by the municipality’s Valuations Policy and the Local Government: Municipal Property Rates Act 6 of 2004.
• The municipal valuation is based on a number of factors and the precise value is calculated according to formulae determined by the municipality’s Valuations Policy and the Local Government: Municipal Property Rates Act 6 of 2004.
• The municipal value is not necessarily equivalent to market value, but according to law, it should be.
• For each General Valuation Roll, the date at which your property should be valued, is 1 year before the commencement of the General Valuation Roll (in this case, 1 July 2017).
• The amount that the municipality charges you for rates each month, is based on your municipal valuation. If the municipal valuation increases, then the amount you pay each month for rates will also increase.
• A Valuation Roll is a database in which the municipal valuations of all properties are recorded on that particular roll.
• Each roll is re-published once every 4 or 5 years and the property values (and categorisations) are updated at the same time. Depending on a number of factors, your property value may have stayed the same, or increased, or decreased, from the value contained on the last roll.
• The municipality should give you notice if your property is appearing on a roll that is being published in the near future.
• These rolls contain only property information like descriptions, valuations and categorisations; they do not contain reasons for why the municipality has chosen these.
• If you have received notice that your property is on a roll that is soon to be published, you should determine immediately whether you are satisfied with the municipal valuation. If you are not, you will have to object.
• Not receiving notice does not absolve a property owner from the responsibility for inspecting the roll and objecting on time.
In most cases, your property valuation will increase. You have to ask yourself whether it is a true reflection of the value of your property. If it is, then there is no point in objecting. If it is undervalued or overvalued then you can object. You have until 3pm on the 6 April to object.
The new rates will kick in on 1 July 2018. To work out how much extra you will be paying, look at your rates bill to determine your old rates charges and the number that CoJ uses to calculate it (in most cases it will be 0.007345 for residential properties).
If your property was valued at R2 million, then your monthly rates bill will be R2 000 000 less R200 000 rebate: R1 800 000 x 0.007345 divided by 12 = R1101,75.
If your property has increased by 50% to R3 million, then your new rates will be: R3 000 000 – R200 000 = R2 800 000 x 0.007345 divided by 12 = R1713,83 (55.6% increase)
This is the monthly rates charge that you will be paying for the next 4 or 5 years, so it is worth objecting to it if it is not accurate.
• In 2013 there were over 80000 objections. This resulted in it taking 3 years to assess the objections.
• If your new valuation was more than 10% above or below the original 2018 valuation, it has to be automatically referred to the appeal board which will add more time to the process;
• If you appealed your objection decision or it was referred for appeal, it can take another year.
• 1 July 2021/22 – It all starts again 4 or 5 years after this one.
There is a very useful article on the SA Property Valuations website entitled “Things to Consider When Objecting to Municipal Valuations.” They say that there are a few things to remember when objecting:
• Only object to a specific property, not to the valuation roll in general or in part.
• You cannot object based on the value of other property values in the valuation roll (they may also be incorrect).
• Do not object based on rates increases. Municipal valuations are based entirely on current market value at the date of valuation and are entirely independent of rates. Though the valuation amount is used to calculate the rates it is the annual budget that determines the fee you pay and the annual increase.
• Use recent comparable sales (that are genuinely comparable) in the area.
• If your property is currently for sale or has recently been on the market, this information should be provided, together with any offers received.
• You can also object based on quality, size, restrictions, servitudes or other things that materially affect the value of your property in relation to the comparable sales in the area. Bear in mind that these may already have been taken into account. As mentioned, there could be errors, and there will obviously be issues that the Municipal Valuer is not aware of due to the nature of mass valuations.
• Be sure to provide details and all relevant documentation, without which your value cannot be changed.
• A valuation by a professional valuer or from an estate agent may be attached, but ensure that comparable sales are included in the valuation.
• Do not object if your valuation is correct. There are cases where on closer inspection an increase in the value is justified. Also if taken on appeal and it is found that the objection is frivolous, the objector may be liable for costs.
• If your value is too low, you should object. It is up to each individual’s conscience, but remember when you want to sell or need a bond, the municipal valuation will be considered.