Property valuations shock: What homeowners can do

Private Property South Africa

Joburg property owners are up in arms over the new municipal valuations of their properties which show astronomical increases.

The average increase for 879 000 properties was 30% over a five-year period, but the valuation of some properties has increased by over 100%.

The increases will mean property owners will face massive hikes on rates bills and municipal services. Many businesses and home owners now fear being squeezed out of their properties as they will be unable to afford the inflated bills.

How the municipal valuations work

Every four years, a general valuation roll determines the municipal values of homes and effectively the property rates that should be paid, based on these values. The General Valuation Roll (GV2018) was certified mid-last year, following the City Council of Johannesburg working closely with professional valuers, data collectors and statistical analysts, to deliver on the project.

On 2 July last year, all 812 000 registered residential properties within the City of Johannesburg were valued using a computer-assisted mass appraisal (CAMA) system, which was done for the purpose of ensuring fairness. However, these valuations may not be entirely accurate. “The problem with municipal valuations is that they may often result in over-valuing and are not a true indication of the market value of properties,” says Francois Venter, Sales Director of Jawitz Properties. Property rates paid by homeowners provide the City of Johannesburg with income for the maintenance and building of roads, libraries, parks, clinics and other facilities that benefit all residents.

“It is not possible to correctly value a property without seeing it. Properties in the same area can be completely different in size, layout and condition, meaning each property should have a personalised market value, which will certainly be different to the value determined by the City of Johannesburg’s blanket valuation approach.” The City of Johannesburg was granted a 12-month extension by the MEC for Local Government meaning the current valuation roll was implemented four years ago. As a result of the extension, the City will implement its next general valuation roll on 1 July 2018.

The onus is now on property owners to prove their properties are worth less.

“Homeowners may tend to think these valuations are conclusive and want to use them as a basis for determining the value of their homes. However, more often than not the Council valuation doesn’t reflect the true market value of a property. A higher valuation simply means paying higher property rates by homeowners.”

Homeowners are, however, able to object to the municipal valuations issued by the City of Johannesburg. The objection period is open from 20 February – 6 April 2018, allowing all homeowners 45 days to lodge an objection to the value of their property.

“While there is no guarantee Council will accept a property owner’s objection, it is definitely worthwhile to check that the valuation is accurate, before it is too late,” Venter says.

“Homeowners should consult with estate agents or independent valuers before the objection period closes. Failing to respond will mean that the given municipal valuation won’t change, and for the next four years, the revised property rates will have to be paid.”

Residents who wish to lodge an objection, can go to the relevant page on the city’s website by clicking on this link.

Where to view the GVR and object to property valuations in other municipalities:
Ethekwini (open until 31 March):
Kouga local authority (open until 30 April):
George (9 March)

Read more: Get free help to contest municipal property valuations

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