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IOLProperty - South African Property For Sale
Monday Jul 30, 2012

Joburg property owners panic over inflated property rates

Beulah Thomas has been inundated with calls and e-mails from frustrated and shocked homeowners whose homes have fallen prey to the Joburg council's new inflated property rates bills.

Thomas, a property consultant at Harcourts, Midrand, has received many complaints as panic among homeowners continued over the pending introduction of a supplementary valuations roll.

In May without any notification, property owners started receiving notices from the City of Johannesburg infor ming them that their property valuations had been updated - with some increases between 50 percent and 75 percent.

The biggest shock has been to residential owners who live on land zoned as agricultural holdings and who have been paying far lower rates because of their zoning but now face paying up to R20 000 in rates and taxes.

Most of the affected agricultural properties are located in Midrand including Bluehills, Kyalami, Glen Austin, President Park, Carlsworld and Randjesfontein.

This week, as the objection deadline closed for homeowners who wished to oppose their new valuations by the council, Thomas was also pondering how she would finance the vast increases in her property rates.

By last Tuesday, the city said it had received just over 4 000 objections out of a total 83 000 Joburg properties that had been revalued by the council.

"These valuations are grossly incorrect some are overvalued by up to R3 million. The value discrepancies in all areas is huge. Why should homeowners pay rates on a property valued by council at R6m when the true market value is R1.2m?"

The council has received a qualified audit report from the Auditor General Terrence Nombembe for the 2010/2011 financial year for among others revenue and accounts receivables.

According the AG's report, due to system integration shortcomings, property categories in the billing system differed compared with the system which contained information on the classification and zoning of properties.

The AG could not verify the service charges and property rate revenue.

In the 2009/2010 financial year, the AG gave a qualified audit to the council for among others revenue accruals that were not billed and the city could not produce substantial audit evidence to support the accruals.

In March, the chairman of the municipal public accounts committee - Sicelo Gcabashe also raised his concerns, in a report, over the inconsistencies in the city's service charges and property rate revenue.

Thomas said she believed the shock backdated and inflated bills that were sent to homeowners in May was an attempt to boost the council's ailing financial situation.

"People are not refusing to pay their rates but this is a problem created by the council. We want to do everything we can to fight this injustice by the city," she said.

"They had time to forewarn residents in 2010 about these changes in valuations but they didn't. The housing market for the past four years has been so bad so how could property values have jumped so high? Who is responsible for these negligent valutions?"

Thomas added that several residents of mostly agricultural holdings were considering legal action against the council should their objections to the new valuations roll not be taken into account. The city has yet to announce its final decision on the valuations roll.

Saturday Star

 
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