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Monday Jan 14, 2013

'Base objections to property valuations on fact'

Cape Town home owners who disagree with their property valuations for this year need to base their objections on fact to win their cases, says Jenny Shaw, professional associated valuer and co-principal owner of Harcourts Back Wave.

According to Shaw, t his year's residential property rates, which will be based on the general valuation of July 1 last year, along with details on how to lodge an objection, will appear on the City of Cape Town website next month to enable ratepayers to lodge objections before implementation.

Shaw, who has in previous years conducted valuations for objections on behalf of the City of Cape Town, says consumers need to be aware of two things: that the valuations are based on actual registered property sales in the area, and that objections need valid grounds.

"Objections on the basis of the market value being used as a method for calculating rates or that the neighbour's property is valued for less than yours will not be acceptable. Objections will only be reviewed if you can substantiate that the market value given by the council is incorrect."

Richard Gray, chief executive of Harcourts SA, says those who want to lodge objections should engage qualified property valuers or estate agents who have been working in the area for some time.

"A professional estate agent will value the property using the comparative market analysis method, which lists comparable sales at a particular time.

"The city's valuation department uses t he same method, but on a mass appraisal basis, whereby different 'weights' are applied to the various value-forming attributes of the property. These include factors like locality, site size, house size, number of bedrooms and bathrooms, outbuildings, pool, condition and view, to name a few."

It's this sort of data that's required to support an objection, he says, adding that the estate agent or valuer will need to compare the property in question with the attributes of the property sales being used in support of the objection.

He recommends that at least three comparisons be used to motivate the value.

Gray says vacant land is double-rated (to encourage building); properties with more than two kitchens are rated as commercial properties since they are seen to be income-producing or at least have the potential to be income-producing; while commercial properties pay higher rates.

Other factors likely to influence the new valuation roll include the demolition or renovation of a property, the construction of new accommodation such as a granny flat, the construction of a new house on vacant land, or the subdivision or consolidation of a property.

"This is Cape Town's third general valuation, and with each consecutive general valuation municipal valuers and data collectors have gained access to, and inspected, more properties," says Gray.

"The result is that the information used in the mass appraisal method is becoming progressively more accurate. This should result in fewer objections being lodged , although a mass appraisal will always result in some errors, as properties even in a similar locality can differ vastly in their value-forming attributes. It's a big challenge for the valuation department, hence the provision of a window period for lodging objections."

Gray also says that property owners wishing to lodge objections need to continue paying their rates until the matter is resolved.

"The City of Cape Town will advise people of their options, which usually include paying what they currently pay, paying the new rates, or paying based on what they believe the correct value to be.

"This will apply until the objection has been resolved, at which point the council will credit their accounts in the event that any excess amounts have been paid."

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