New property valuation notice received? Now what?

Several local authorities around the country are publishing General Valuation Rolls. For Cape Town, the Roll has been signed off by the Municipal Valuer and was promulgated in the Provincial Gazette on 10 February 2023. The notice states that “Owners will be notified of their valuations in writing. The notices will be posted to the postal address held on the City’s database.

Other areas where valuation rolls are currently available includes City of Johannesburg (closes 31 March 2023), Overstrand, Swellendam, Cape Agulhas, and others with some objection period closures being imminent.   

The Cape Town objection period opens on 21 February 2023.  The City will have satellite centres where you can go and view the GV 2022 Valuation Roll for your property, maybe meet the municipal valuer or ask staff for any other general help. This is best suited for residential properties where owners want to object themselves.

General valuation

 A General Valuation is produced currently every 3 to 4 years which is in terms of the Local Government Municipal Property Rates Act (MPRA) whereby the Market Value of the property is determined. The City of Cape Town usually conduct their valuation every three years but owing to Covid extended the revaluation to 4years.

Municipal valuers are not obliged to inspect properties (and cannot inspect all). They apply various valuation techniques allowed in terms of the MPRA including Computer Assisted Mass Appraisal (CAMA) especially used for residential properties.  CAMA is a computerised system using multiple regression to determine the valuation as one of the techniques used. Other methods include Replacement Cost (generally for Specialised Properties) and an Income approach for other commercial properties using researched market information (also performed on a mass basis).

Every property owner is affected by the Cape Town General Valuation Roll. This and it properties houses/flats, retail, all other Commercial and industrial properties. Hotels, hotel rooms (in sectional title schemes). schools, universities, guest houses, places of Worship etc. are all included in the valuation roll. Valuation approaches will differ. It is suggested that if your property for any reason is omitted from the valuation roll and this includes especially new built properties, subdivisions, sectional title and new housing schemes an omission notification should be lodged.  The reasons being is that it may well be sometime before the City Valuers have noted that an occupation certificate has been issued and if you are trying to sell the property, you need to obtain a Rates Clearance. If there is no valuation on the property, then you cannot pay any rates hence the importance of addressing the valuation as soon as possible.   

Rates and taxes 

The first question posed is what my new rates will be on the new valuation. Mistakenly, owners use the current tariff, escalate that tariff by 10% and then work what the new rates on the property are. Unfortunately,  the City only advises when the objection period has closed what the new Tariff will be.  This is in terms of a separate process whereby a Rates Policy which must be done with Community participation is published.  There are different categories with different tariffs that will be promulgated.

Thus, one must ensure that the letter you receive notifying you of the new valuations contains the correct Rating Category. Vacant land in terms of the current policy is usually treated at the same rate as the business/commercial tariff. Of course, the correct valuation must be given. So, if you built a new house and have a rating category as vacant, this must be addressed.  Non receipt of notification is not a ground for objection. Two new rating categories are likely to be introduced.

The objection process

Your letter will state the new valuation and will likely enclose an objection form. According to the City of Cape Town the objection period will commence on or about 21 February 2023 and close on 29  April 2023.  If you do not receive this notification, you can obtain this from the City of Cape Town Valuation Website. Other municipalities will offer the same service but their policies and closures of objection periods will differ.

You will consider the valuation and make an informed decision as to whether you want to object or not. Remember the date of valuation is 1 July 2022 i.e., it is likely to have been based on the 2021/2022 sales that the City has captured. It is not the current valuation.  So, residential property owners should consider the properties around you that may have been sold over that period.

What you can do

1. Check on any sales ideally prior to 1 July 2022 that surround you or in the immediate vicinity that you know.
2. Be careful how you interpret Computerised Reports that are provided generally as “Free Valuations” by the various Estate Agencies.  Each transaction MUST be checked. For example, and often noted in sectional title sales, one figure is provided but there may well have been three other sections included etc.
3. Consider your accommodation against the properties you have knowledge.  If you have difficulty at this stage, it may be worthwhile considering the professional help of a Registered Property Valuer to assist you. While you will pay for their services, one must bear in mind that registered valuers are required to have a 4 year degree and at least 2-3 years’ experience before being registered. They will spend more time on you valuation than the Estate Agents and some can also assist you with an appeal should the situation arise.
4. In a sectional title scheme, every registered section is allocated its own value. If overvalued you must object to these as well.
5. Commercial property/other non-residential property owners will be differently considered and different methodology will be applied.

Search the Cape Town valuation roll for City of Cape Town General Valuation Roll GV2022. 

Author: 

Jerry Margolius registered Professional Valuer/Arbitrator/Chartered Surveyor (Valuation) MRICS Fellow (Life) FAIV / M RICS / F Ass of Arbitration / Appraiser 

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