In the last few years, many municipalities around South Africa have changed the way in which they value residential and commercial properties in order to determine the rates they apply to these properties. Naturally, the higher a property is valued, the higher the rates will be.

Generally speaking, most property owners expect that the rates they are being charged by their municipality should accurately reflect the market value of their property. Very often, however, this is not the case. Municipal evaluations are usually carried out every four years, but the increase in rates that generally comes after these evaluations is frequently vastly inflated when compared to the corresponding rise in the value of the property over the same time period.

Experts agree that the reason for this is two-fold. Firstly, municipalities tend to view privately-owned property as a handy, taxable resource they can tap for monies needed to improve disadvantaged areas within their boundaries. And secondly, historic evaluations were carried out following a one-size-fits-all formula that often resulted in valuable properties being assigned a low municipal value. Municipalities feel they now need to compensate for this.

The Municipal Property Rates Act states that properties must be valued at market value, which is defined as “the amount the property would have realised if sold on the date of valuation on the open market by a willing seller to a willing buyer.” However, there is no legislation legally compelling municipalities to conduct individual property inspections, and the mass appraisals that are usually carried out leave considerable room for error.

While most property owners are happy, to a point, to know that a portion of the rates they pay is allocated to the upliftment of areas with poor infrastructure and service delivery, some of the more recent evaluations are so wildly out of the ball park that owners are left with no choice but to obtain a second opinion as to the true, accurate and fair value of their property.

What Can I Do?

Current legislation allows any person to lodge an objection against any property on the valuation roll if they believe the municipal evaluation to be incorrect. This is when a professionally executed, alternative valuation from an independent and respected valuer can be hugely advantageous – figures show that up to 90% of municipalities will adjust their original estimate when presented with an objection that is backed up with such an evaluation.

Since the release of the new Municipal Property Rates Act of 2004, The Property Partnership East Rand has been successful in every single valuation objection we’ve lodged on behalf of our clients. Chat to us today about how we can help you with yours.