While Johannesburg property owners who believe they have been prejudiced by sky-high municipal valuations of their properties have been advised to submit objections and appeals, history shows that it could take years to finalise such matters.
Until such time, property owners are expected to pay according to the disputed valuation or face electricity disconnection.
Moneyweb posed several questions to the mayor’s office, but despite asking for an extension in time, the office has failed to answer the questions.
Moneyweb has learnt that 2 318 appeals relating to the 2008 general valuation roll and subsequent supplementary rolls have not yet been finalised
Advocate Anthonie Viviers, chairman of the 2008 valuations roll appeals board is preparing a complaint to the Public Protector after the MEC for Co-Operative Government and Traditional Affairs Paul Mashatile failed to extend the board’s term when it ended on October 31 last year, despite the fact these two appeals were still outstanding.
The board was appointed by Mashatile to deal with the appeals and reviews relating to the 2008 general valuation roll and 11 subsequent supplementary rolls. The City of Joburg was responsible for payment and administrative support to the board.
In September last year, with only a month of its term left, Viviers expressed his concern in a letter to Msahatile that the results of many of the appeals and reviews the board did finalise have not been captured on the city’s billing system. As a result rates bills were still presented to property owners on the basis of the disputed valuations.
The city further failed to make some repayments to various property owners whose valuations have been lowered, Viviers alleged.
Mashatile in response said in a letter to Viviers, dated December 2017, that he does not have the authority to extend the board’s term unless the City of Joburg requests him to do so. He says the city’s position is that “the board has done its work in terms of reviews and appeals” and that the capturing of the board’s decisions is an administrative function for which the city is responsible.
In his correspondence Viviers disclosed that the city received more than 45 000 objections relating to the 2008 general valuation roll and supplementary rolls.
He told Mashatile that not completing the outstanding matters “will have serious financial consequences for both the City of Joburg and the various rate payers”.
According to director of valuations at Rates Watch, Ben Espach, the objections following the 2013 general valuation roll have largely been dealt with, but a large number of appeals are still outstanding.
Council is currently dealing with objections relating to the fifth supplementary roll that was published in March last year, Espach says.
He notes that whenever a valuation is adjusted by more than 10% following an objection, such an adjustment has to be reviewed by the appeals board. Following the 2013 general valuation roll there were 32 000 cases to be reviewed, of which 28 000 are still outstanding, he says.
The South African Property Owners’ Association (SAPOA), which represents the commercial property sections, raised its concern over the increase in municipal rates.
SAPOA CEO Neil Gopal said in a press release “total operating costs for commercial properties averaged R50.80/m² as at June 2017, of which 22% or R11.30/m² went to municipal rates and taxes. Considering that municipal rates and taxes accounted for R2.20/ m² in 2000, this means that it has effectively doubled in real terms over this period – a fivefold increase in nominal price terms”.
He pointed out that rates and taxes have been the second fastest-growing operating cost item for property owners and investors since 2007 with a compound annual growth rate of 9.7% (inflation + 3.6%). “Indeed, only electricity costs have risen at a higher pace,” he said.
“Rising operating costs threaten the sustainability of net returns across the spectrum of commercial and industrial property investment. Since the sustainability of the property sector is a key focus for SAPOA, we have been vocal in challenging the basis and consistency of municipal rates charged to our members,” Gopal said.
He said: “Our Constitution and laws are clear that rates and taxes must be levied in a just and equitable way and this should be done by accurately determining the value of properties. SAPOA is committed to ensuring rates are being levied from a correct base, and not being overcharged. We believe this is essential to further an enabling environment for business and the commercial property sector in South Africa, and to help ensure the sustainability of our economy.”
In response to the outcry about the sharp increase in many property valuations, Joburg mayor Herman Mashaba last week announced that he has decided to intervene and have 8 000 properties that seem to have been overvalued reassessed. Some valuations increased by more than 100%.
That represents less than 1% of the total properties on the general valuation roll.
Mashaba said these new valuations will be contained in a new valuation roll to be published before the general valuation roll takes effect on July 1.
He did not disclose whether the new valuations will be done by the same valuers who compiled the general valuation roll and the city did not respond to Moneyweb’s questions in this regard.