The news that the Gupta family's home has been devalued from R16.8-million to a mere R490 000 has outraged South Africans. How is this possible, given that most homeowners will be facing steep increases once the new valuations come into effect?
The Gupta family just keeps on making headlines - for all the wrong reasons. Firstly, there is the on-going controversy surrounding government advertising in the family's newspaper, The New Age. Then there were questions asked about the paper's business breakfasts that parastatals are sponsoring to the tune of millions. And as if that wasn't enough to garner South Africa's attention, the fact that a jet ferrying the family’s wedding guests from India landed at Waterkloof Air Force base, where waiting police officials were on hand to 'blue light' them through to Sun City, has managed to get most law abiding citizens a little hot under the collar.
The heat on the family doesn't seem to be abating and in a recent report in The Saturday Star, it was revealed that the family's main residence, set on 4 207m2 in the up-market suburb of Saxonwold in Johannesburg, has been valued at a paltry R490 000. The municipal value of the home which features, among other things, a helipad, swimming pool and a cricket pitch, has plunged from the R16.8-m recorded on the 2008 valuation roll. The drop in value means that the rates against the property will decrease from approximately R7 844 a month to around R157.90 when the new tariffs kick in during July this year.
Before you all start rejoicing and assume that you will also be paying less for the privilege of living in your home, think again. The Saturday Star reports that the drop in the value of the Gupta’s property is certainly not the norm and neighbouring suburbs have seen increases of up to 48 percent.
It is highly unlikely that those who have incurred dramatic increases have the privilege of a home-based cricket pitch and while some may indeed fly their own aircraft, very few could afford the added expense of having their own personal heli-pad. On the face of it, the situation appears to be totally ridiculous, particularly when one compares the prices achieved by other sellers in the area during the past 12 months.
Lightstone statistics reveal that the average price obtained for a property in the Saxonwold area is R4.624-million. This figure, however, could well be on the low side when one considers that only six freehold properties have been transferred so far this year. That being said, one property changed hands for between R800 000 and R1.5-million, and the remaining five homes were sold for more than R3-million.
Of course this could all be a bit of a storm in a teacup and the incorrect valuation the result of an honest error. However, given all the negative reports that have surrounded this well-to-do family recently and their obvious connections to those in power, the mistake appears to be just a little too coincidental.
From bitter experience, property owners are only too aware that the overwhelming trend is for rates to go up and not down. In the absence of a motivated application, it is exceptionally rare for any property to be re-valued at a lower rate than that previously recorded. Sadly, at this stage most South Africans will assume the worst and until those responsible explain exactly how this came to pass, will continue to believe that once again, the Gupta family has somehow managed to benefit from their friends in high places.