MUNICIPAL VALUATIONS UPDATE
Category Advice
Currently the Cape Town Municipality's GV 2018 general valuation roll continues to attract criticism and attention because of ongoing claims of inaccuracy, the slow response to objections and the perceived lack of communication in advising individual property owners of valuation decisions, now 18 months after objections closed on 30th April 2019.
Steer & Co submitted a great number of objections on behalf of clients where numerous objection enquiries were turned away where it was felt that the values were fair, ie. close enough to the property's July 2018 market value. Nonetheless, many of our objections were rejected and it therefore follows that appeals against the outcome of the objections were recommended and submitted on behalf of property owners.
In handling these, several related issues have come to light such as the valuation of vacant residential plots and the rating category applied to these properties. Of interest, is the City of Cape Town's Municipal Rates Policy (http://resource.capetown.gov.za/documentcentre/Documents/Bylaws%20and%20policies/Rates
%20Policy.pdf) which is separate from the Local Government: Municipal Property Rates Act (http://www.cogta.gov.za/cgta_2016/wp-content/uploads/2016/09/LG-Municipal-Property-Rates-Act-no.6-2004.pdf) and is reviewed at each general valuation to take into account different categories of rating for specific properties, e.g. residential rebates, agricultural rebates and community service properties such as churches to name a few.
In the case of vacant 'residential' zoned property, owners are entitled to apply for a residential rating category where the subject property is continuous with an adjoining improved property on condition that both properties are registered in the same property owner's name, e.g. John Citizen owns erf 5 and 6 where he has a dwelling on one plot and the garden on the adjoining property. Where the properties are completely separate, e.g. bisected by a road, the rating category of the vacant plot will revert to the full 'commercial' tariff, as is applied to a vacant property irrespective of its zoning classification. A related consideration is when redeveloping a property by clearing a plot; careful consideration of the approach is necessary to avoid punitive property tax.
As always, you are invited to direct enquires in this regard either to valuations@capetown.gov.za or to one of our valuers via pauline@steer.co.za.
Author: John van der Spuy