Joburg to revalue properties

© Felix Lipov – 123RF.com

The city revalued all housing and commercial properties in its administrative jurisdiction in 2017, in terms of a legislated process that takes place every four years.

Last week, Business Day reported that businesses, residents and other property owners affected by the valuation increases had accused the city council of unfairly inflating property values to boost its flagging income.

This came soon after the Joburg council passed its adjustment budget, in which its 2017/18 capital and operational expenditure budgets were adjusted downwards. It received R926m less revenue than expected in service charges. Johannesburg mayor Herman Mashaba said in a statement on Wednesday, 7 March, that many of the properties identified as problematic had received valuation hikes of more than 100%.

Mashaba said the valuations entailed an average increase of 30% over a five-year period for the 879,000 residential properties.

The values of 40.71% of the properties had been hiked 21%-40% and those of 30.65% of the properties 41%-60%. Eight percent of the property values were increased 61%-80% and 2.23% were raised 81%-100% and 3.38% more than 100%.

Mashaba said on Wednesday the owners of the properties to be revalued would receive section 78 notices from next week, which would provide the revised valuations.

The notices would also make provisions for a 30-day period during which property owners could provide relevant information to be taken into account in the review process.

Mashaba said that these properties would be placed on the supplementary valuation roll. "In cases such as this, the city must assume the burden to address the problematic valuations before the implementation date on July 1 2018," said Mashaba. This differed from the conventional objections process, which placed the burden on account holders to object to the valuation.

Municipal valuer Piet Eloff, in response to emailed questions, told Business Day that the municipality could not put a cap on the valuation levels, saying the municipal valuer was independent and could not be prescribed to.

Legislation made provision for the city to object to the values of properties where they disagreed, Mashaba said. Eloff said the properties in question were mostly commercial properties, but also included some blocks of flats.

He said a perceived fair increase in the valuations differed from area to area but on average it was 40% for residential properties and 30% for commercial properties.

The city's finance department has indicated that a process to reset rates tariffs was still under way.

Gauteng premier David Makhura added his voice to those of distressed residents and companies, saying that he was "deeply concerned" about the city council's proposed rates increases.

"These rate hikes will in no doubt put financial strain on the residents who are already buckling under financial pressure due to the weak economic environment," he said.

Makhura said he would meet Mashaba to discuss it and would appeal to the mayor to ensure that Joburg residents were not unduly burdened with unjustified rate hikes.

Source: Business Day