Municipal property valuations in the spotlight

Every four years the contentious issue of property valuations is raised.

This is when the municipality ascribes new valuations to your property and ultimately thousands of people lodge their objections, often comparing their homes to others in their street or neighbourhood, and asking why their homes are worth more or less.

According to Dolphin Coast Residents and Ratepayers Association (DOCRRA) chairman, Deon Viljoen, the municipal valuation is a value ascribed to your property by the valuations department at the municipality, calculated according to a formula determined by the municipality’s valuations policy and the Municipal Property Rates Act.

The law states that property should be valued at market value, which is the amount the property would have realised if it was sold on the date of the valuation in the open market by a willing seller to a willing buyer.

What happens when the market changes? The Act provides that the municipality must set a new date and re-value all properties at least once every four years.

The municipality uses revenue from property rates to perform their basic functions and fund services such as maintenance of streets, sidewalks, street lighting and storm drainage facilities, the building and operation of clinics, parks, beaches and libraries including the administration of the municipality.

The amount the municipality charges you for rates each month is based on your municipal valuation. If the municipal valuation increases, then the amount you pay each month for rates will also increase, and vice versa.

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What is it that makes one residential property worth more than another? According to the municipals valuation department there are many factors which influence the value of a property and these can broadly be broken down into location, size of property, extent and type of buildings, quality and condition.

Neighbourhoods or suburbs also play a significant role and this determination is based on sales of properties around yours.

Private Property, on of SA’s leading property websites, says that sales reflect the characteristics of an area, such as security and nearby schools or amenities, so indirectly these play a part in property values. In certain areas, factors such as view, external noise and security are also considered.

According to Viljoen, ratepayers need to determine whether the valuation attributed is a correct reflection of the property. If this amount is higher than the actual value of their property then they will be paying proportionally higher rates on it.

“Should you feel that your property has been over or under-valued, or incorrectly categorised, you may lodge an objection. You can do this by completing and handing in the prescribed form together with any information you have in support of your objection.”

Forms can be obtained from your local municipality.

Once you have lodged an objection the matter is referred back to the municipal valuer, who will review the valuation in light of any additional information provided by you.

You will be informed in writing of the outcome of this review.

If you are still unhappy with the valuation you can lodge an appeal which will be heard by the Valuation Appeal Board appointed by the provincial government.

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An appeal can be lodged at your local municipality together with the outcome of your objection.

According to Viljoen ratepayers must lodge objections before the valuation roll is confirmed.

Once this process is complete residents will have very little recourse, if any, to object to the value ascribed until the next valuation is done in four years’ time. Viljoen added that the next round of property valuations could start within the next year.

“As this is a fairly comprehensive process we estimate that it will only be implemented for the 2021/2022 municipal financial year starting July 1, 2021.

“DOCRRA will be forming a dedicated sub committee to be fully involved in this process. We will inform our members of the process when it unfolds, progress made and guide and assist our members to interact with the municipality on this issue. DOCRRA looks forward to this process as it is an opportunity to correct current anomalies as well,” Viljoen said.

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