Specialist team: 2 options in terms of dealing with city’s valuation roll
"It will be in the best interest of all parties involved if the municipality appointed a competent person to identify and object to under-valued properties," said Ben Espach, a professional valuer and director of Rates Watch.
POLOKWANE – “It will be in the best interest of all parties involved if the municipality appointed a competent person to identify and object to under-valued properties,” said Ben Espach, a professional valuer and director of Rates Watch.
Rates Watch is a professional team specialising in analysing all aspects of the Municipal Property Rates Act including valuations, rates and taxes, compliance with the Municipal Property Rates Act and lodging objections and appeals. They were appointed by the South African Property Owners Association (Sapoa) recently to investigate the handling of the valuation process by the Polokwane Municipality.
A local property developer, who wishes to remain anonymous, told Review that there were between 20 000 and 30 000 under-valued properties in the municipal area if measured against the new valuation roll.
He said of these, more than 10 000 were allegedly situated in areas such as Sebayeng and Mankweng and the land there is valued at approximately 25% of its true market value. A second property developer, who also wished to remain anonymous, said some commercial properties in Seshego was valued at 10 times the value, while the rest of the properties in that area were valued at less than 40% of their market value.
He said this under-valuation was also applicable to vacant land, where some properties were valued at less than a quarter of their purchase prize. “Illegal land use will also have a serious impact on revenue collection by the municipality, with some properties now categorised as residential and their values adjusted to a quarter of their actual value,” he explained.
According to Espach the alternative was that the new roll would not be implemented and the service provider instructed to compile a new roll to be implemented only on July 1, 2015.
“It is not possible to compile a quality roll in a period of five or six months,” he said. The tender for compiling the new valuation roll was awarded to a Durban-based firm, eValuations, late last year.
Espach said according to information at his disposal, the total value of all the properties has only marginally increased to R52 billion and, given that the previous roll was based on market values as at July 2009, the total value of the new roll should have been at least R60 billion.
“Properties that are under-valued have a serious impact on the properties that are correctly valued. Ratepayers will object to values that are too high. These values will most probably be corrected by the municipal valuer or the valuation appeal board, but no changes will be made to undervalued properties unless it is objected to,” he said.
Espach said the municipality should consider lodging objections to the properties that are under-valued. He said although there will be further costs to appoint a competent person to identify and object to the under-valued properties, the goodwill and support of the ratepayers that will be gained could not be measured in monetary terms.
Municipal spokesperson, Tidimalo Chuene, said the valuation roll must reflect the market values of properties. “This is why we invite the public to inspect and object where necessary if the values do not reflect the market prices of properties,” she said.
She said the time to object to the new general valuation roll has been extended by the Polokwane Municipality. The roll will now be open for inspection until June 23.
