Is a rates appeal worth your while?
Friday, April 30 is the deadline for lodging objections to the valuation of Cape Town properties.
All properties were recently revalued in the latest municipal general valuation, effective from July 1 last year, to determine the cost of rates for owners.
The purpose of the valuations, which reflect on the city's website,
www.capetown.gov-DOT-za, is to secure a key revenue stream - one that accounts for almost a quarter of the income needed to run the city.
With two weeks to go before the objections deadline, property owners should carefully consider their options. You can access details of your property, the new valuation and the locality of sales in your area, on the city website.
You can also register your objection there.
If no information appears about your property or you have not received your new valuation in the post, e-mail the chief valuer on Christopher.Gavor-AT-capetown.gov.za or phone him on 021 400 1111.
Once on the website, click on services and departments and go to "P" for property valuations. There are various ways of finding your property: site address, erf number and so on.
Your valuation will show, among other things, your rating category - whether you are rebated or not (you will not get a residential rebate if you are running a business from home such as a B&B or a catering or hairdressing business).
You can also apply for an additional rebate if you receive from less than R3 000 a month from any source to less than R8 000 a month. You will have to prove your income when applying for this type of rebate.
Properties worth less than R88 000 are not liable for rates. This threshold may be raised to R200 000 in the new budget.
To help decide whether to object or not, click on the valuation reference number to see the information on which your new valuation was based. If the information is wrong and to your detriment, you can note this in your objection.
By clicking on "view sales" you can see comparable sales in your area. Not all the details of the sold properties are on the website, so it is best to get them at one of the city's 18 information centres.
An important development is that, if you are objecting, you will not have to pay interim rates bills based on the city's valuation until your objection has been settled.
You must, however, go to the valuation department and negotiate a reasonable interim payment basis until you have agreed to a revised valuation.
Also, be careful to object only on a sound, technically correct basis, because you may well be charged for the valuation court's costs.
If you are going to object, you should establish the factors or characteristics to motivate a reduction in the valuation.
These could include a council-registered water course (river or stream) through your property; immense rocks or an odd-shaped site which eliminates your ability to develop as neighbours have; the presence of a large overloaded provincial-registered trunk road on your front boundary, or say, exposure to high winds or possible harm from fires in adjacent public open spaces.
Other examples might include having a council electrical or drainage servitude running through your property, a lack or loss of views compared with surrounding properties; excessive distance from shops, schools or the beach, meaning you have to travel everywhere by car; the obstruction of views by adjacent buildings or a newly built one, or that you have an old house with high maintenance or restoration costs.
Once you have received your council revaluation notice and before you rush into submitting an objection, ask yourself if you would have been prepared to have sold your property in July (the date of the revaluation) for an amount less than the council's revaluation.
Only if you would have been prepared to have accepted such a lower selling price and are convinced that the valuation is too high, should you consider consulting a qualified valuer or estate agent.
Some people have had their 2006 valuation increased by well over 100 percent, even up to 200 percent, and are feeling indignant.
But there's reason for caution. You may well have been badly undervalued last time and the city is now correcting its mistake, which it is quite entitled to do - and you probably did not object then, perhaps because you were so delighted at the "very fair" valuation.
Do not waste time comparing your new valuation with your existing one.
Rather get good advice as to whether the new one is market value or not, by using the existing sales records and professional advice.
Should you decide to approach a valuer for professional advice, first request a fee quotation (probably on an hourly rate or percentage basis).
If the valuer disagrees with you, you have at least been given a quick and reasonably inexpensive professional opinion.
Conversely, you can ask the valuer to execute a full valuation which will be extremely useful in backing up your objection.
Estate agents are also able to help with a written assessment of what your property would have sold for in July 2009, based on their records.
It is worth making sure your objection is compiled with professional help. The South African Institute of Valuers can assist with names of valuers.
It's important to note that even if your valuation has increased, this does not necessarily mean that your rates bill will escalate pro-rata to the valuation increase, since the overall market value increase of all properties in the city could mean the rate in the rand will be adjusted down in this general valuation year.
Some people have received the same valuation for 2009 as they did in 2006. This proves that the city has taken the recent recession into account.
The big differential in increases or decreases in valuations was considered to be a basic big flaw on the last valuation and it will be interesting to see what happens this time.
In other words, has the city managed to improve its rating system so that all ratepayers are treated equally?
Initial studies of the general valuation last year reveal that this skewed kind of rating system, which applies a single rate to properties with inexplicably fluctuating values within their categories, may well be recurring.
This arguably results in a valuation that is not fair and equitable to all ratepayers.
It is refreshing that Local Government MEC Anton Bredell is making a plea for an investigation into a new approach to municipal property valuation methodologies.
For the next few years until the next general valuation, owners' new revaluation will stay constant (unless it is adjusted by a supplementary valuation) and future rates-bill increases will be based only on increases in the rate in the rand.
One way or the other, ratepayers must be aware of their rights and, because of the increased costs of running the city, be prepared to pay more in rates from July.
The extent of the increase will be revealed only once the rate in the rand has been announced in the next budget.
# John Powell is a quantity surveyor and a member of the management committees of the Camps Bay Ratepayers and Residents Association and the Greater Cape Town Civic Alliance.
http://www.iolproperty.co.za/roller/news/entry/is_a_rates_appeal_worth
