Residents should not be caught napping when it comes to scrutinizing the Makhado Municipality's proposed new 2018 to 2023 valuation roll, otherwise some might be in for a few unpleasant surprises.
The 2018 to 2023 valuation roll for Makhado was compiled by Geospatial Valuation Technologies, a company from East London, after they were awarded the tender under bid number 51/2017 to the amount of R9 998 500.
The proposed new valuation roll is currently open for public inspection with residents having until 4 May to submit inputs or objections against the new valuations on their properties.
Many residents will remember the furore sparked by die 2014 to 2018 valuation roll, which most described as a mere thumb-suck exercise by the municipality and realise that this public participation process is of utmost importance.
But will residents see a repeat of the controversy sparked by die 2014 to 2018 valuation roll? Judging by what the region's tax payers had to fork out to have the roll compiled (almost R10 million), one should hope not.
The Zoutpansberger took a closer look at the new roll by focussing on the proposed new values of properties in a single street, namely Schimper Crescent (Skuldbult) in Louis Trichardt.
The newspaper looked at the percentage increase between the 2014/18 and 2018/23 valuation roll of 22 properties in Schimper Crescent and it made for some interesting reading. Of the 22 properties, 17 increased in value as expected, but the interesting part is the percentage increase. The percentage increase in value varies between 4% and 1777%. But having said this, it should be noted that the two properties where an increase of over 1000% was recorded were valued far below market value in the 2014/18 valuation roll (R200 000 and R250 000 respectively) and the 2018/23 valuation roll has subsequently rectified the mistake. Overall there were, however, a 72.3% increase in property value that will ultimately place a bigger financial burden on home owners.
To put above into perspective. Currently, local home owners are paying taxes of 0,80c in the Rand on residential property (1,10 cents in the Rand on business, industrial and commercial property) as per the notice of general assessment rates published in the Provincial Gazette of 16 June 2017. This notice also allows for a 45% rebate to be deducted from market values of properties of qualifying senior citizens, as well as an amount of R26 137,20 to be deducted from the market value of all residential properties. So, if your residential property is worth R1 000 000, you would pay 0,80 cents in the Rand after the R26 137,20 was deducted from the total value. That works out at R649,24 per month on property rates.
The 72,3% overall increase in Schimper Crescent's valuations will cause a lot of home owners' municipal bills to rise dramatically. Of the 22 property owners, 11 of them will have to pay a R1 000 or more in property rates per month when the new valuation roll becomes effective. Of them, the two home owners whose properties were valued at R200 000 and R250 000 will now have to fork out R2 370 and R1 980 extra on their respective monthly rates bill.
At this point, however, it must be mentioned that of the 22 properties looked at in Schimper Crescent, five depreciated in value of between 14% and 24%. Why these properties have lost their value is unknown.
So, overall it seems that there are going to be "winners" and "losers" if it comes to the new valuation roll. But is the new valuation roll again just a thumb-suck exercise or is it this time around a more realistic view of what is going on in the market.
Here again the Zoutpansberger took a closer look as the Municipal Property Rates Act (Act 6 of 2004) clearly states that market value forms the basis of any valuation and that the market value of a property is 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.
Using the Act as a guide, the Zoutpansberger did a comparative analysis of the last twenty properties to be sold the last two years near Schimper Crescent. This included properties sold in adjacent streets such as Bergh-, Barnard-, Snyman-, Forestry- and Hertzog streets.
Of the 20 residential properties sold in the area the last two years, nine sold for more than they were valued in the 2014/18 valuation roll. Two of the 20 properties sold for exactly what they were valued for, while nine sold for less than they were valued for. Of the same 20 properties that were sold, 15 sold for more than they are currently valued in the 2018/23 valuation roll, while the five remaining properties sold for slightly less than what they are currently valued at according to the 2018/23 valuation roll.
Overall, it would seem that the new valuation roll is fairly in line with current market prices. Having said that, residents should not ease into comfort too quickly. Mistakes do happen and therefore it is of utmost importance to inspect the new valuation roll. Especially farmers should take a closer look at the roll, whether they pay or do not pay property rates. Many of them are in for a surprise (see accompanying article).
The proposed new valuation roll is available at Office C027 at the Makhado Civic Centre in Krogh Street, Louis Trichardt, from 08:00 to 13:00 and from 14:00 to 16:00. The valuation roll can also be inspected at the regional administration offices at Waterval, Dzanani and Vleifontein satellite office. It is also available from the municipality's website at www.makhado.gov.za.