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Cape Town's Property Boom boosts Valuations

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Cape Town's Property Boom boosts Valuations

by City of Cape Town
22 Mar 2007
City of Cape Town
City of Cape Town

Cape Town's property boom has resulted in an average tripling in property prices since the last municipal valuation in 2000. This does not, however mean that property rates will increase by the same factor. The higher values are reflected in the latest municipal valuation roll that is now open for inspection at various City of Cape Town offices.



Over 735 000 individual notices have also been mailed to property owners throughout the entire Cape Metropole, from Atlantis to Gordon's Bay.

The Valuation Roll was only completed at the end of January 2007 and the City is still monitoring the effects of the new Roll. In simple terms, the average increase in residential property values is 3,8 times. All other things being equal, rates would remain the same if a property value has increased by this factor and increase or decrease by variations above or below this factor. In addition, there are a range of factors that will also impact the specific amounts that ratepayers may have to pay, such as the residential rebate which is currently 30%, but also needs to be reviewed in the light of relative values between different categories of properties. The City is also looking at the separate rate levied on refuse and sewage to see if a more equitable charge can be made.

"Municipalities are required by law to conduct a General Valuation at least every four years to ensure that property rates are levied in a fair and equitable manner, says Christopher Gavor, Director of Valuations for the City of Cape Town.

In terms of the Municipal Property Rates Act of 2004, the general basis of valuation is the market value of a property. This is defined as the amount the property would have realised if sold on the date of valuation in the open market by a willing seller to a willing buyer. The latest property valuations reflect market values as at July 2006.

Ratepayers are cautioned not to link an increase in value to a rates increase. The cent-in-the-rand is a separate issue from the reasonableness of the assessed value.

Therefore, the resulting increase in rates is not a basis for objection that the Valuation Board would accept. Objections must be based on the fact that the assessed value does not reasonably reflect the market value of the property as at July 2006 and needs to be motivated with details of comparable properties, actual sales or information that may not have been taken into account such as servitudes which devalue the property.

"The impact on property rates is not a consideration in determining the property value, nor is the extent to which properties receive services. These considerations are taken into account when the rates policy is determined", Gavor emphasised.

Ratepayers who object to their assessed valuation are required by the Municipal Property Rates Act of 2004 to file an objection before they can have their valuation reviewed by the City. If property owners need help in filling out the objection form, they may obtain free assistance from the Valuation Office personnel at any of the 12 objection venues located conveniently throughout the greater metropolitan area.

"To date, some 1800 objections have been received. Most of them will be attended to before implementation of the roll on 1 July 2007. The City would like to get the objection process completed as soon as possible and the value changes made before billing commences in July 2007. However, the City acknowledges that there have been some delays in the valuation notice letters arriving late, particularly for section-title properties and will be reviewing the final date for submitting objections.

The valuation notices for sectional title units have been sent to Body Corporates and Managing Agents for distribution to property owners as those are the postal addresses that the City has on its database. A special appeal is therefore being made to both the Body Corporates and Managing Agents to assist in the distribution of these letters. Where they encounter any problems, they are encouraged to contact the City Valuation Offices for assistance.

"Council is monitoring the objections, and if general patterns of problems arise, it will order a general review in areas where it appears necessary," says Mr Gavor.

The City Valuation staff is also carefully reviewing the assessed valuations of all the over 120 000 sectional title units since this is the first time that they have been individually valued (as directed by the Municipal Property Rates Act of 2004).

"Initial teething problems with the website have now been resolved and there is continuous monitoring of the site to ensure that it is performing at an optimal level, says Mr Gavor.

Property owners can access their new property valuations on the City's web site at http://www.capetown.gov.za/ where properties may be searched by erf number or street address, or in the case of sectional properties, by scheme name.


END

MEDIA RELEASE
NO. 39/2007
5 MARCH 2007


ISSUED BY:
DIRECTORATE: COMMUNICATION AND MARKETING
CITY OF CAPE TOWN
TEL: 021 400-2201 FAX: 021 957-0023

MEDIA QUERIES:
CHRISTOPHER GAVOR
DIRECTOR: VALUATIONS
CITY OF CAPE TOWN
TEL: 021 400-1345


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