Property rates increase: 53%

[SSung]

I purchased my first house in February of this year in the northern suburbs of Cape Town. My rates bill for July now indicates an increase of ~53%.

Although I have been vaguely aware of the valuation/rates process in the past I was never informed of such an increase & also not given the opportunity to object (the cutoff date was apparently the end of April/June).

Is there anything I can do, or do I just have to suck it up?

 

[RTC]

I went through the mission of objecting against the municipal valuation of a R565,000.00 property bought in Sept 2011. The new valuation was set at R680,000.00. My objection with supporting evidence was denied. So I'll have to pay the massive rates increase.

 

[ProfA]

I purchased my first house in February of this year in the northern suburbs of Cape Town. My rates bill for July now indicates an increase of ~53%.

Although I have been vaguely aware of the valuation/rates process in the past I was never informed of such an increase & also not given the opportunity to object (the cutoff date was apparently the end of April/June).

Is there anything I can do, or do I just have to suck it up?

Suck it up. Happening all over the country. Minority paying for services majority are supposed to receive will inevitably mean that rates increase faaaaar above inflation.

 

[Crowley]

Although I have been vaguely aware of the valuation/rates process in the past I was never informed of such an increase & also not given the opportunity to object (the cutoff date was apparently the end of April/June).

https://www.capetown.gov.za/en/propertyvaluations/Pages/HowToObject.aspx
http://www.capetown.gov.za/en/propertyvaluations/Pages/default.aspx
http://www.capetown.gov.za/en/Pages/GeneValua2012objectperiodcomingend.aspx
http://www.property24.com/articles/cape-town-valuations-and-objections/16907

It was on the news almost every day so unfortunately you are going to have to suck it up.

 

[SSung]

I went through the mission of objecting against the municipal valuation of a R565,000.00 property bought in Sept 2011. The new valuation was set at R680,000.00. My objection with supporting evidence was denied. So I'll have to pay the massive rates increase.

Yeah, it looks like the objection process is pretty much pointless anyway.

It's just incredible to believe because I had been looking into the market for about a year before I made the purchase & nowhere did prices increase at anything approaching that rate. The valuation only went up by about 25%, so can anyone tell me how they arrive at a 53% increase?

 

[BTTB]

Anybody know what is the national norm, Municipal vs Market values, in percentage?

From my understanding the Municipal value should be less than the market value, perhaps 60% or thereabouts.

 

[supersunbird]

Yeah, it looks like the objection process is pretty much pointless anyway.

It's just incredible to believe because I had been looking into the market for about a year before I made the purchase & nowhere did prices increase at anything approaching that rate. The valuation only went up by about 25%, so can anyone tell me how they arrive at a 53% increase?

Remember there is a yearly increase on the rates, not just the valuation.

 

[supersunbird]

Anybody know what is the national norm, Municipal vs Market values, in percentage?

From my understanding the Municipal value should be less than the market value, perhaps 60% or thereabouts.

If I have to guess its around 70 to 75% for mine

 

[Hendrix]

Mine actually came down 5%, am I the only one?

 

[HavocXphere]

Mine actually came down 5%, am I the only one?

The magic 8ball used to make these decisions favored you....this time round.

Suburbs seem to get randomly selected & totally screwed with the rates.

 

[satanboy]

My apartment was valued at the price I paid for it last year (minus R10K)...sucks.

 

[Hendrix]

I really wonder how they value a property, is it on the ERF size, and then the building size, does the area have an impact, and who decides what area should pay more or less.
No-one seems to have a concrete answer

 

[Jola]

My property has been valued at double the market value, and they just ignore all objections.

Nothing that I can do about it except to sell.

This is in Joburg, the municipal authorities are grossly incompetent.

 

[BTTB]

Back in 2000 I objected to my valuation on our business property, the Valuation Board actually even came out to our place for their own inspection.
Very nice crowd of people, the one was even one of my clients.

Anyway, from what I could determine there was a value for the land and a value for the building, added together and that was the value, they backdated it to the 2000 valuation. Over 13 years the municipal valuation has increased fourfold. Our property is a bit different as it has a dual zoning of residential and commercial. I am so glad I objected as it set a lower base for them to work from.

Similarly we have an empty erf down the coast, rates is about 30% of the bill, the charges that make up the lions share of the bill are for water, sewerage and electricity availability and also for the fire department. Basically 70% each month on an empty plot is for something you are not using.

Another place, our holiday house recently acquired, needed R4700 just for the water and electricity deposit to transfer the account and I notice the same phenomena, a whole bunch of basic charges before you even use one litre of water or one KW of electricity. I told the lady at the counter at the Overstrand Municipality that I suspect the reason there are many properties for sale is the high rates and taxes. Of course that is only part of the reason, we know the Banks have pulled back heavily on mortgages on coastal properties, so many are for sale and just standing, sucking up someone’s cash for monthly rates and basic charges.

 

[ToxicBunny]

Anybody know what is the national norm, Municipal vs Market values, in percentage?

From my understanding the Municipal value should be less than the market value, perhaps 60% or thereabouts.

It should theoretically be 100%...

 

[Legosa]

The thing that irks me the most is every year we pay above inflation rates for rates and services, then every 5 years they increase the value of your property and your rates jump again. Double dipping as it were. At this rate in 20 to 30 years our rates bill will be more than our salaries.

 

[noxibox]

I really wonder how they value a property, is it on the ERF size, and then the building size, does the area have an impact, and who decides what area should pay more or less.
No-one seems to have a concrete answer

In Cape Town at least they published detailed information about how they determined the value.

 

[reactor_sa]

I don't know how they come to the values they do. Mine went up 20% but obviously doesn't mean I will get another 20% if I sell. Crooks...

 

[BTTB]

My utility bill just arrived in the mail, 100% increase in rates. A 100% increase in the 2009 to 2012 Rates Valuation Roll pushed my Municipal rates account in line with my Electricity account.

Other than a few select residential and sought after business properties I have not heard of any increasing by 100% over a 3 year period, especially not during a recession.

I fired off an email to the Valuation Board now, it is technically late as objections have closed. Nobody can absorb 100% incrases in costs. The products I sell, some have stayed the same or gone up marginally over the last few years, competition is stiff for business, if I had to increase my selling price by 100% I would go out of business.

There is no fairness in any of this, we are being ripped off.
The only positive thing I can say is it is nice to see some work being done in our area by Council, but at what cost to the man in the street.
What % of each Rand paid to Council actually comes back to our community? If only we knew the answer to that question. If it was more than 50% I would say OK, the other half pays for wages and stuff, but in reality it is probably less than 10%.

 

[JoeSokolic]

Im a property broker and I own commercial-property [dot] co [dot] za so I get a lot of calls regarding this kind of thing.

This new situation is making life extremely hard to make a living. Not only do we have to find people space, we now have to negotiate on behalf of then with Eskom and God knows who else to get a better deal for our client. Needless to say, when we try talk to the rates 'providers' we get bank stares, bricked up doors, lies and then the inevitable unexplanable bill or increase down the line, which impacts our earnings dramatically. We earn money in some cases as companies rent space over a time period. This last year, we have had numerous deals and tenancies go south do to inexplicable rates increases throwing budgets way out. When you have already done all the work and then see your earnings die like that, its a pretty hard thing to not get angry about.