PROPERTY VALUATIONS - TO OBJECT OR NOT TO OBJECT

2013-03-13 14:22

 

PROPERTY VALUATIONS

TO OBJECT OR NOT OBJECT

The City of Cape Town (“CCT”) recently sent property owners the latest Property Valuations which will be effective from the 1st July 2012 to the 30th June 2016.  The rates adjustment however will only take effect on the 1st July 2013.

At the time that this article was published, the CCT had not as yet adopted the Rates Policy which sets out the tariff at which the various classes properties (i.e. residential, commercial, industrial and agricultural), will be charged.  The last Rates Policy that was issued by the CCT was in 2012, in terms of which rates on residential properties are calculated at 0,006062c per Rand.

The final date for the lodging of Objections is the 30th April 2013 and no extensions will be granted. Objections have to be lodged on the prescribed forms which are obtainable on the CCCT’s website www.capetown.gov.za/propertyvaluations.  It will be noted from the Objection Form that there are number of grounds upon which objections can be lodged to property valuations, but the most common ground for objections is likely to be based on an incorrect property value, i.e. that it is too high.

The CCT has valued properties based on market values as at 1 July 2012, in other words, what a willing buyer is prepared to pay a willing seller in respect of such property.  Although most property owners have a general idea as to whether or not the CCT Valuation is indeed within the ballpark, if indeed a decision is made to oppose the said property valuation on the basis that it is too high, this needs to be supported by a number of supporting documents, the most important of which will be a sworn appraisement by a professional property valuer.

When considering whether or not to lodge an objection to a potentially high property valuation, one must consider the costs of undergoing the process of the objection relative to the potential saving which will accrue, not only over the next 4 years, but also the knock-on effect thereafter due to the fact that the next property valuation is likely to be based on the “incorrect” property valuation.

By way of an example, if the total costs relating to the lodgment of the objection equates to R6,000.00, based on a rate tariff of 0.006062c per Rand, one would have to get a reduction of the property value of at least R250,000.00 so as to be able to secure a direct saving over the next 4 years. This is calculates at R250,000.00 multiplied by 0.006062 equals R1,515,50 per annum multiplied by 4 years, thus R6062.00.

If you wish to consider lodging an objection against a Property Valuation, please visit our website at www.abgross.co.za or email us at valuations@abgross.co.za or info@abgross.co.za.

oOo

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