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Thursday, 14 January 2010

Your New Rates Municipal General Valuation Jan 2010

The City of Cape Town has revalued all the properties in the Cape Town Unicity in its Municipal General Valuation which was carried out on 1 July 2009.

It is currently posting its revised draft valuation of your property on the City’s website www.capetown.gov.za and you will shortly be receiving in the post a notice from the City officially notifying you of this revaluation with a request that you either accept it or object to it by a particular date (POSSIBLY IN APRIL 2010)

What can / should you be doing now that you have received your new draft rates revaluation?

You should now be establishing the factors / characteristics of your property which you can use to motivate a reduction in the valuation should you now feel that you have been overvalued.

Typical examples could be : a Council registered water course (river!) and immense rocks which eliminate your ability to develop further on your property as owners around you can with double / second dwellings, granny flats and the like - the presence of a six-metre wide overloaded Provincial registered trunk road (say Camps Bay Drive) on your front boundary which has dangerously speeding traffic on it and causes you difficulty in accessing / leaving your property by car for some hours during rush hours - the exposure to high winds and possible harm from fires in adjacent public open space, etc.

Other examples could be : a Council electrical or drainage servitude running through your property, a lack or loss of views compared with surrounding properties – steeply sloping sites - irregularly shaped sites inhibiting the ability to develop them properly or take advantage of the available view - south facing house - excessive distance from shops, schools, beach etc. necessitating wheeled transport for every journey – obliteration of views by adjacent building structures and so on

Once you have received your Council revaluation notice and before you rush into submitting an objection because you think it is too high, ask yourself whether you would have been prepared to sell your property in July 2009 (the date of the revaluation) for an amount less than the Council’s revaluation now presented to you in 2010. Only if you would have been prepared to have accepted a lower selling price (including the Selling Agent’s fees and VAT), should you then consider deciding whether to consult a qualified Valuer who will then be able to advise you as to whether your suggested lower valuation is valid or not.

Should you decide to approach a Valuer for professional advice, first request a fee quotation (probably on an hourly rate basis) before investigating with him / her as to whether your contention that the revaluation is too high is valid or not. If the Valuer disagrees with you, you have at least been given a quick and reasonably inexpensive professional opinion upon which you can decide whether to proceed with your objection or not. Should you be advised to or should you decide to proceed, you should then appoint the Valuer to assist you with your objection to the Valuation Court.

Estate Agents are also able to assist you with your objection and can help you considerably by presenting you with their written assessment of what your property would have sold for in July 2009.

The objection document is a very daunting document. CBRRA therefore suggests that you do not submit an objection without a technically correct motivation which is well prepared with professional help.

The South African Institute of Valuers can assist you with names of Valuers (Address c/o J.J.Hofmeyr & Sons, 13 Piers Road, Wynberg, 7800. Telephone 021 7611803).

Should you decide to object to the new revaluation which you have received, the document which you will shortly be receiving from the City will inform you where it has opened information centres which will assist you in the compilation of your objection. At these information centres, you will be able to ascertain the sales amounts and other details of the properties near your property to enable you to make an accurate comparison between such sold properties and your property.

Remember that if you live in a sectional title apartment block, you will again be billed separately and directly for your unit and not in your levy which used to reflect a proportion of the overall building rates bill.

Should your valuation have increased, this does not necessarily mean that your rates bill will escalate pro-rata to the valuation increase.

This is because the increase in the total overall value of all properties in the Unicity since July 2006 will probably mean that the Rate in the Rand may be adjusted down in this GV year. The current recession may even have had its effect on the new valuations, but this movement will differ from one suburb to another depending on the situations and market attractiveness of such suburbs. It could well happen again in this GV that in some areas the resulting new rates bills in July 2010 may result in lower rates bills in some areas and much higher rates bills in others.

This was considered to be a basic big flaw on the last GV and it will be interesting to see what happens this time – ie, has the City managed to improve its rating system so that all ratepayers are treated equally in their new rates rates valuations so that the new GV can be seen to have been equitable to all in terms of the Municipal Property Rates Act No 4 of 2004.

Ideally there should not be a situation which happened in the 2006 GV when of about 750 000 properties valued, 16% received reduced valuations, 50% received increased valuations by not exceeding 15%, 27% increased by between 15% and 39%, 5% increased between 30% and 40% and 2% increased by more than 40% some even up to 325%! Assuming that nobody whose valuations had increased by more than 15% would have objected, only about one third of the above total valuations would have been objected to, ie ±250 000 divided by ± 55 000 actual objections = ± 22%, which was far in excess of the City’s then claimed 8% objections.

For the next few years until the next GV, your new revaluation will stay constant (unless it is adjusted by a supplementary valuation in due course) and future rates bill increases will be based only on the Rate in the Rand applicable to your property.

One way or the other, be aware of your rights and start preparing to possibly pay more rates than the normal annual increase from July 2010 onwards, the extent of which will only be revealed to you after the forthcoming Council rates revaluation notice which you will be receiving shortly is received by you and the new Rate in the Rand is announced by the City when it announces its next budget this year.

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