By Anees Teladia
With many Cape Town residents experiencing increases in their valuations and the accompanying rise in rates, a sense of distress has taken hold of many property owners. People already struggling to pay outstanding rates owed to the City of Cape Town will have even lighter pockets when they dish out more of their hard-earned money.
Speaking to VOC Breakfast Beat on Tuesday, Deputy Mayor of Cape Town, Alderman Ian Neilson said the City has completed the general valuation of all 875 000 properties across the city and that those are now available to the property owners.
“We are in the objection period, so people can submit objections at valuation centres or online – in which case you can do it until the end of April,” he said.
Addressing concerns around the valuation process and how these valuations are calculated, Neilson provided some commentary on what gets considered when values are determined and additionally how rates are affected by these valuations.
“The key issue is whether the valuation is a proper reflection of the value of the property. There’s no other consideration when it comes to valuation. We must value the property according to the market value of that property.”
“We must [however] differentiate between valuation and rates. Valuation can only be market value of property. When it comes to rates, that is where the city can change things,” said Alderman Neilson.
“If a property value went up roughly around the average, people will be paying approximately the same rates. If it [a valuation] has gone up less [than the average], they pay less.”
Alderman Neilson then addressed the topic of rebates for pensioners (people over the age of 60) whose household income is less than R15 000 per month.
“If they are in that category, they can get a rebate on their rates irrespective of their property’s worth, on a percentage basis.”
However, a community member from Bo-Kaap expressed dismay at foreigners buying land there whilst the city continues to change by-laws to accommodate plans for high-rise buildings.
The concerned Bo-Kaap resident commented that foreign European investors buy property for exorbitant prices, which in turn dramatically affect the valuations of other houses. Those Bo-Kaap residents then struggle with the increase in valuations and the accompanying rise in rates.
The resident added that although pensioners get rebates, their children cannot and will not be able to cope when they pass on.
“We are obliged by law to value properties in terms of sales in the area. The issue on the valuations we can do nothing about. We have to value according to market value,” said Neilson in response to these concerns.
“The rebates system is available. We also have an indigent policy. Currently, for household incomes of less than R4000 per month, you get a 100% rebate irrespective of the value of property. We do consider these things. We understand the problem in the Bo-Kaap.”
Flaws in the system
When questioned on the computer aided mass appraisal system the City utilises for these valuations, Neilson insisted that the processes followed are “completely fair”.
“If people are unhappy with a valuation, they need to look at sales data in their area. That’s what determines whether the valuation is appropriate or not.”
“It [the computer assisted mass appraisal system] uses the basic information of property size, size of structure, square meters, number of bathrooms, number of bedrooms etc.”
“It’s really no different from getting an estate agent or a valuer to come value the property,” said Neilson.
Property owners should note, however, that objections can be made to these valuations.
“You can object to the valuation on any property,” said Neilson.
“Go onto the city website [and] search for your property. There’s a button you can click that will give you all the sales data within a radius around your property. That’s the information that the property owner must use to argue the case…if people are unhappy with a valuation, they need to look at the sales data in their area. That’s what determines whether the valuation is appropriate or not.”
Residents have been informed that there are valuation centres open, dealing with these issues.
“Residents can object their valuations in person until the end of this month, but if you can do it online, its open until the end of April.”
“Property owners would have received a notice that lists all those places [valuation centres] and the times that they are open. The information is also available on the city website.”
“There’s always room for error,” said Neilson.
“…humans make mistakes and our values can have mistakes.”
For more information, residents are urged to check the City website and contact the relevant officials.
Residents will be billed on new valuations. If objections are, or have been submitted, and there has been no outcome yet, residents can speak to a City official at one of the cash offices and make an arrangement.
However, it is worth noting that while Neilson commented that during the objection period the City is willing to make payment arrangements according to what resident’s think their values are, it is at a risk.
Residents will be building up an arrears on their accounts if the objection isn’t found to be favourable.
If, however, there is an outcome to an objection that a resident is still dissatisfied with, residents can take it on appeal to the provincial valuation board.