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Tough times for homeowners

By unknown | May 13, 2008 | COMMENTS [ 0 ]

Isaac Moledi

Isaac Moledi

It seems there is no place in South Africa for the ordinary homeowner to hide.

First it was the price of fuel that went through the roof. Then it was the food price shocker - and as if that wasn't enough, we had a jump in the prime lending rates before getting hit by the revised municipal rates on property.

The new property valuation rolls are currently being compiled countrywide in terms of the new Municipal Property Rates Act.

And experts say it's important for homeowners to understand the limited window of time in which to lodge objections.

Closing dates for objections vary between local authorities, as do the actual rates that will be applied, calculated as a percentage of the valuation.

In Johannesburg, for example, the new valuation roll is open for inspection until May 27. Any objections to a valuation must be submitted by no later than 4.30pm on that date.

In Cape Town the closing date for objections is the end of next month. In eThekweni more than 22000 objections had already been received by the March 31 closing date, according to a municipal spokesman.

The national implementation date for all the metros is July 1, according to RealNet chief executive Tjaart van der Walt.

Van der Walt says it's important for homeowners who want to object to a new municipal valuation of their property to do so before the deadlines because the next opportunity they will have to do so is in 2012.

The new rates system assesses both the land value and the value of any improvements to the property.

"The act is intended to apply municipal rates more broadly," says Van der Walt. "Importantly, it makes provision for exemptions, deductions and rebates based on income levels and other criteria, while also providing for objections."

And if you believe you have grounds for an objection his advice is to start researching, with professional help, the market value of your property compared with similar properties in your immediate area.

"You may then submit a motivation to the municipal valuer and can expect the valuer to provide, in writing, a basis for his decision and any adjustments."

Van der Walt says if an objector is not satisfied with the decision of the municipal valuer, he has the right to lodge an appeal with the appeal board and a formal hearing will then take place.

Property experts describe the new property valuation as municipalities' invention to re-tax the already taxed hard-earned investment that you have used in improving your property.

As to what will happen to this rate when the value of your property falls is anybody's guess, they argue.

The valuation process has raised other concerns with some experts pointing to its serious implications for both the buyer and seller.

Their main concern is that certain buyers will be charged transfer duties based on the municipal valuation of the property as opposed to the purchase price as per offer to purchase.

This means that where the municipal valuation is higher than the purchase price the South Africa Revenue Service will request the transfer duty to be paid on the higher valuation.

The expert advice is that if you want your property to be sold as soon as possible, you must ensure that your municipal valuation is accurate.

For buyers, they say, before signing that offer to purchase, request the municipal valuation.


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