Why is everyone talking about Municipal Valuations?

You may have heard people talking about municipal valuations lately. Wondering why it is a hot topic at the moment? Here is a quick summary for you.

What is a municipal valuation?

This is the value of your property, determined by the relevant local authority. This value plays a roll in determining the municipal tax associated with your property (i.e. your rates / property tax).

How is this different from market value?

Market value by definition is the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.

Municipal value is defined in the Municipal Property Rates Act (MPRA). It considers a number of factors and a precise figure is determined according to a formula. While the intention is for market value and municipal value to be the same, the outcome of the formula has not given such results. 

How does this impact me?

Every few years the local authority updates the municipal valuations of the properties in the region - regions differ in time period, however it is generally 3 to 5 years.. The database that this information is stored on is called a valuation roll. Every few years, the value of your property may have changed (or even stayed the same). If your property is on a valuation roll that is to be updated, you should receive a notice of such in the post. 

The 2022 General Valuation roll for the City of Cape Town (CoCT) will be open around the 21st February 2023. As such, all properties within this region will be revalued based on their market value as at the 1st July 2022. The new rates and taxes, based off of these values, will be payable from the 1st July 2023.

I am still not sure if this is good news or bad news?

If you haven’t figured this out already, the higher your municipal valuation, the higher your property rates payable each month. If you receive a notice of your municipal valuation and think that it may be valued too high, you have a period to object. This objection period is 60 days - from when the valuation roll opens, 21st February 2023, to the 30th April 2023. The consensus seems to be that this period is quite short, so if you are not happy with your municipal valuation, we encourage you to object sooner rather than later!

But how do I object?

Great question!

According to the CoCT, objections must be lodged on the prescribed objection form during the prescribed period and emailed to valuationsobjection@capetown.gov.za. These forms will be available on CoCT website (www.capetown.gov.za) during the objection period mentioned above for those properties eligible to submit objections (i.e. when you have been notified).  Late objections, or those made outside of the prescribed objection period will not be accepted.

You will also need to attached a motivation to this objection form. In terms of legislation, values on a valuation roll must be market related and must be based on actual sales that took place around the date of valuation, i.e. 1st July 2022.

Some things to note:

• If the value changes by more than 10% either side, the appeal board will have to review the objection.
• If you are not happy with the outcome of the objection, you may appeal the objection within 30 days of the decision notice. An appeal board hearing will then be held whereby you can provide oral evidence and question the municipal valuation official.

Your last question is probably, ‘how to I get all this information to motivate an objection’? That is where we come in. We have access to all the data you could need to justify the market value of your property. Remember, you will be paying these rates for the next 3 to 5 years, if you feel that you would like to object, now is the time to look into it!

Have any questions? Contact our sales team at sales@amazingspaces.co.za to assist.