The City of Cape Town has recently revalued all the properties in the Cape Town Unicity in its latest Municipal General Valuation (GV) which was carried out as at 1 July 2009. It is has recently been posting its revised draft valuation of your property on the City’s
website and you should by now have received 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 the end of April 2010 which is very soon now .
BackgroundSome background before discussing your options as to how to react is as follows. The City of Cape Town requires finance to run the city. Each year it passes a budget and votes how it is going to raise this money from various sources. Broadly speaking, these sources are property rates and taxes (±24%), charges for water supplies, refuse removal, sewerage removal and disposal, electricity supplies and sundry other means for generating income.
The total budget allocation from property ±rates is divided by the total new GV of all ± 750 000 properties of all types in the Unicity and this is how the City calculates the Rates in the Rand for the various property categories. The new Rate in the Rand is multiplied by your agreed valuation of your property with the City to calculate your rates bill before rebate reductions if applicable.
What to do nowWhat can / should you be doing now that you have received your new draft rates revaluation ?
On the City's website you can access the new valuation and details of your own property and the localities of sales in your area which you can use for your objection should you elect to make one.
How do you do this ?Look up the City’s website at
www.capetown.gov.za.
If no information appears on the website against your property (and it is still happening!) or you have not received your new valuation in the post, email the City’s Chief Valuer on
Christopher.Gavor@capetown.gov.za or phone him on 021 4001111 to complain.
Once on the website, look for and click on :
- Services and departments
- “P” Property Valuations
- “Welcome to the Property Valuations Website”
- Search the Valuation Roll and
- click on the Valuation Roll for 2009 (at the bottom of the page)
- then find your valuation by entering one of the following after clicking on the relevant heading
- Site address (Number and street name – to get your whole street only enter the street name)
- Erf number only (You will be presented by all the same erf numbers as yours in the whole Unicity – scroll down by using the consecutive numbers on the bottom left hand side of the page until you find yours) This is the easiest access method.
- Farm
- Sectional title (Property name and unit number)
Your valuation will show:
- Valuation reference
- Erf number and suburb
- Owner’s name
- Rating category (eg rebated or not rebated - you will not get a residential rebate if you are running a business from home eg B & B, catering or hairdressing business).
You can also apply for an additional rebate if you receive less than R 3,000 from any source per month (currently 100%) on a sliding scale to less than R 8,000 per month (currently 10%). These percentages may change when the new budget is announced. You will have to prove your income when applying for this type of rebate. Currently owners whose property market value is below R88,000 do not pay rates. There us a possibility that this threshold may be raised to R200,000 in the new budget.
To assist you in your deliberations as to whether to object or not, click on your left hand column Valuation Reference Number and there will appear the details of your property on which your new valuation was based.
If the information is wrong and to your detriment, you can bring this to the City’s notice in your objection. In addition, by clicking on the “View Sales” wording on your details, you can get the details of many comparable sales in your property’s area, which you can use in your objection if needs be. These details include:
- Address
- Erf No / suburb
- Usage – ie One dwelling residence
- Site area
- Sale date
- Sale price
The City states on its website that it has all the details of the sold properties for you to use but these are not yet on the website. Rather go and get them at one of the eighteen Information Centres set up by the City.
One very important development is that, if you are objecting, you will now not have to pay interim rates bills based on the City’s valuation until your objection has been agreed with the City. You must, however, go to the Valuation Departrment and negotiate a reasonable interim payment basis (say the old rate plus an agreed percentage) until your objection is responded to and you and the City have agreed your revised valuation.
Also, be careful only to object on strictly sound technically correct submissions, because you may well be charged for the Valuation Court’s costs if it considers that the City’s refusal of your initial objection was rejected by you for emotional or frivolous reasons.
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!) through your property
- 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 large overloaded Provincial registered trunk road on your front boundary which has excessive and 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 spaces, etc.
Other examples could be:
- Council electrical or drainage servitude running through your property
- A lack or loss of views compared with surrounding properties
- Steeply sloping sites or irregularly shaped sites -inhibiting the ability to develop them properly or take advantage of the available view
- A south facing house
- Excessive distance from shops, schools, beach etc. necessitating wheeled transport for every journey
- Obliteration of views by adjacent building structures
- An old house which needs high maintenance or restoration costs
- The recent erection of a massive new block of flats which has derogated from the property values of adjacent affected neighbours, and so on.
Get a valuationOnce you have received your Council revaluation notice and before you rush into submitting an objection because you think it is too high, ask yourself carefully whether you would have been prepared to HAVE SOLD 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 such a lower selling price (including the Selling Agent’s fees) and are convinced that the valuation is too high, should you then consider deciding whether to consult a qualified Valuer or Estate Agent who will then be able to advise you as to whether your suggested lower valuation is valid or not.
Some people have had their 2006 valuation increased by well over 100%, even up to 200% and are feeling very indignant.
A word of caution here. You may well have been badly undervalued last time and the City is now correcting its previous mistake, which it is quite entitled to do – and you really did not choose to object last time, did you, because you were so delighted at the then “very fair” valuation and your chickens are now coming home to roost?!
Do not waste time comparing your new valuation with your existing one. Rather get good advice as to whether the new one is Market value or not, by using the existing sales records and getting the advice of the proper professionals.
Remember, seeing that you have access to everyone’s valuations, you are quite entitled to object to the City that you are of the opinion that a property you have noticed seems to be undervalued – the City welcomes this approach. If the property has been incorrectly undervalued, it will be revalued higher at the City’s next supplementary valuation. Of course anyone is entitled to object to what they consider to be an undervaluation of your property!
Should you decide to approach a Valuer for professional advice, first request a free quotation (probably on an hourly rate or percentage 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.
Conversely, you can ask him / her to execute a full valuation on your property which will be extremely useful in backing up your objection.
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 based on their own relevant sales records.
The objectionThe objection document is a very daunting document. It is therefore suggested 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). Alternatively look up the Yellow Pages.
Should you decide to object to the new revaluation which you have received, the document which you will shortly be receiving or have received 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 market 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 new rates bills in July 2010 may result in lower rates bills in some areas and much higher rates bills in others. Some people have received the same valuation for 2009 as they did in 2006. This proves that the City has taken the recent recession into account.
This big differential in increases or decreases in GV valuations 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 30%,
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.
Initial studies on the City’s 2009 GV reveal that this skewed kind of rating system, which applies a single rate in the rate to properties with inexplicably fluctuating values within their categories, may well be occurring again in this valuation, thereby resulting in this GV again possibly not being entirely fair and equitable to all ratepayers equally across the Unicity. It is refreshing to read of the Provincial Government’s Minister Anton Bredell making a plea for an investigation into a new approach to municipal property valuation methodologies.
At present, the impression is being repeated that the City using the much detested objection process to correct the mistakes which it is initially making in its GV. For the next few years until the next GV, your new revaluation will stay constant (unless it is adjusted by a supplementary valuation by the City in due course) and future rates bill increases will be based only on increases in the Rate in the Rand applicable to your property.
One way or the other, be aware of your rights and, because of increased costs of running the Unicity and possibly increased inflation, start preparing to perhaps pay more rates than the normal recent annual increases from July 2010 onwards, the extent of which will only be revealed to you after the forthcoming Council rate / Rand is announced by the City when it announces its next budget and rates policy this year.
John Powell is a Practising Professional Quantity Surveyor and is a member of the Management Committees of the Camps Bay Ratepayers and Residents Association and the Greater Cape Town Civic Alliance.
