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07/10/11 : City of Johannesburg Supplementary Valuation Roll 7 Open for Inspection  The City of Johannesburg has the proposed Supplementary Roll open for inspection at the Valuation Department based in Braamfontein, The Metro Center, A-Block, 4th Floor from Wednesday 5th October 2011 to 30th November 2011.
Ratepayers are advised to inspect and enquire if their property value has been corrected by the municipal valuer by means of an entry in the Supplementary Valuation Roll. Both the municipal valuer and you the ratepayer have the legislative right to propose a correction by means of the Supplementary Valuation Roll.
Important points to remember
· Property value impacts rates payable
· Date of valuation and date of implementation
· Property zoning does not necessarily equal category
· Information supplied on objection forms must be defendable
· Motivated Valuation Report to accompany the objection form
· An objection might lead to an appeal board hearing
· An appeal board hearing is an informal court procedure
· COSTS CAN BE AWARDED AGAINST THE RATE PAYER IF ALL THE NECCESARY STEPS ARE NOT ADHERED TO
· Time is limited as objections have to be submitted on or before 30 November 2011.
We can assist and or manage the entire process to ensure a successful outcome. Fax or email your latest rates account to 011 440 7794 or info@gbewing.co.za together with your contact details.
  02/02/11 : Billing Crisis - What Crisis? As published in the Sandton Chronicle 11 February 2011:
Mayor Amos Masondo should be sent to the naughty corner for his dismissive and insensitive handling of ratepayers’ concerns i.e. the council’s billing crisis causing delay or even cancellation of transfer of ownership, extended occupational rent, mortgage cancellation and creating massive fictitious credit. His remarks indicate his lack of property economic knowledge and awareness of his administration’s mismanagement, all of which has created this crisis for the property market owners and ratepayers.
Regrettably the billing problem is symptomatic of various departments’ mishandling of
1. Issuing of clearance certificates
2. Data capture and transfer – three year backlog
3. Ownership disputes e.g. duplicate accounts, unrefunded seller’s deposits
4. G.I.S. prime informatics of the property system – behind the time and losing the battle of keeping the system current
5. Valuations – incapacitated due to understaffing and infusion with the valuation appeal process
6. Rates objections and appeals – two to three months has become two to three years
7. Supplementary valuations for rezonings, consolidations, subdivisions, proclamations, servitudes, occupation certificates, correction of categories and land extent etc. – delayed until after the appeal process is completed
8. Rebate applications
* Finance department – unconcerned and unhelpful in taking ownership for the billing crisis and non-accountability for errors
* Legal department – quick to appoint debt collectors but if the problem is proved to be the City of Johannesburg the problem goes into a permanent loop
* Billing department – suffers the brunt of the above errors and cannot address any of them, blaming the system
We call on the minister to appoint a billing ombudsman that can fix the system, treat the ratepayer as a valued customer and fix their mistakes before sending out letters of demand at great cost to the council.
The mayor needs to hang his head in shame and acknowledge that the billing crisis is a huge and costly concern, and make an apology. 12/04/10 : 2010/2011 Johannesburg Property Rates Shocker In Johannesburg, property tax is scheduled to increase by 12% - C.P.I. multiple of 2.1.
Electricity increases at 19% for households and 28.9% for large power users is unwelcome news, no matter the need to buy increased production capacity, C.P.I. multiple of between 3.3 and 5.07 will hurt.
The approved rates will vary accordingly to consumption, property sizes, valuations and categorized usage or ownership, but the trend is up, up and away over C.P.I.
All municipalities have shown massive increases in salaries and wages, and deterioration in service delivery. Service charges are up 15% (C.P.I. multiple of 2.63).
With downward pressure on rentals and an increase in vacancies, both residential and income producing properties projected overall returns will slump. The existing income properties are showing negative capital growth and below C.P.I. returns.
What a come down and for how long?
Tighten your belts by 15% and feel the pain. But more importantly exercise good management practices to survive the recession. 15/02/10 : Pitfalls in Building Insurance Most owners of improved property have insurance on the property. Few realise the importance of insuring for the correct value. The value must be enough to reinstate the buildings and all improvements, should destruction or damage result from any of a variety of causes.
An immovable property consists of the land and generally all improvements on the land of a permanent nature. Although there may be improvements which may legally not be regarded as forming part of the immovable property, these are exceptions with which we need not be concerned for present purposes. Generally all buildings on the property would be included in the ambit of the immovable property, and for convenience these buildings will simply be referred to as improvements.
The owners of an immovable property with improvements thereon potentially face numerous perils against which they would wish to be insured. A typical policy would cover for instance: structural failure, power surges, water damage, fire damage, vandalism, theft, break-in damage, damage to the garden, and physical deterioration. It should be noted that there are normally exclusions from the risks covered of which the owner should take note of when insuring the property.
Two common problems are that of under and over insurance. The question of how much to insure a building for is not as straight forward as people may think. Although many owners have building insurance, many do not take the proper steps to ensure that the full value is insured. Many people believe that the insurable value is the market value of a property, whereas it is in fact the correct value of the cost of reinstatement of the improvements as new, including costs such as professional fees and demolition costs. In the event of underinsurance, the insurance company will apply an average, and will pay out only a proportion of the cost of reinstatement, on the basis that the insured is a self insurer for the balance of the cost. Assume that the reinstatement cost is R10m, but the building is only insured for R7m. In the event of a total destruction of a building, the insurance company will only pay R7m, and the owner will have to carry the balance of R3m itself. On the same example, if the building is only partially destroyed and the reinstatement cost is R5m, the insurance company will only pay R3.5m (7/10ths of R5m) and the owner will carry the balance of R1.5m itself.
There is also the problem of over insuring. When the time comes to be paid out, the insurance will only cover an amount that the insurance company believes is correct. In reality the owner will have paid premiums on a higher value without receiving any benefit for the additional part of the premium.
A professional property valuer will ensure that the improvements on your property are correctly valued for insurance purposes.
Victor Gautschi
BSc Property Studies (UCT)
GB Ewing & Associates (Professional Property Valuers) 19/01/10 : Auctions Our property valuers attend weekly auctions of commercial, retail, industrial and residential property. We have an up-to-date library of auction results for easy reference and, together with our valuation methodologies, we are able to provide you with the answers to the following questions:
- Should I buy or sell through an auction company or go the more conventional route through an estate agent?
- What is the value of the property in today’s market?
- What is the potential value of the property?
- How do I go about buying or selling at an auction?
- How does a reserve price work?
- Who pays the commission and what is reasonable?
- Which auction company can provide the best service?
As independent property valuers we can answer all your questions and help you make the right decisions in today’s market. 09/12/09 : Embattled Ratepayers Need Ombudsman Frustrated by disputed bills, ratepayers urgently need an ombudsman to untangle officials from a web of ineptitude.
Despite the percentile decrease of disputed accounts, bully boy tactics are being used against innocent victims of bureaucratic financial bungling.
Any and all problems can be reported to us, should professional assistance be required. 30/11/09 : Unwanted News We were recently asked to value a residential property in Oaklands, Johannesburg for a deceased estate. The family was convinced that the property was worth R3.5 million. This was based on the municipal valuation used for property rates in addition to discussions with friends and estate agents.
Our valuation of R2.75 million came as a shock to the family.
The Real Value i.e. the estimated new replacement cost depreciated was R3.5 million however the Market Value was a different story.
Offers were received from R2.6 million to R3.0 million with various conditions attached. The final accepted offer after commissions netted the family R2.85 million.
The Unwanted News came true! We see this happening with most sales today. Sellers will often wait for their price, hoping that someone will make a Real Value offer which rarely materializes. 17/06/09 : City of Johannesburg Proposed Tariffs - 2009 [html] City of Johannesburg 2009 Tariffs
Assessment Rates
| Category | Ratio's | CurrentTariff (08/09)
(Cents in The Rand) | ProposedTariff (09/10)
(Cents inthe Rand) | Increase | | | | | | | | Agricultural | 1 | 0,004 | 0,0044 | 10% | | Business | 3 | 0,012 | 0,0154 | 28% | | Business Sectional Title | 3 | 0,012 | 0,0154 | 28% | | Education | 1 | 0,004 | 0,0044 | 10% | | Farming | 1 | 0,004 | 0,0044 | 10% | | Mining | 3 | 0,012 | 0,0154 | 28% | | Multiple purpose | 3 | 0,012 | 0,0132 | 10% | | Municipal Not Rateable | 0 | 0 | 0 | | | Municipal Rateable | 1.2 | 0,0048 | 0,00528 | 10% | | Public Service Infrastructure | 0 | 0 | 0 | | | Religious | 0 | 0 | 0 | | | Residential | 1 | 0,004 | 0,0044 | 10% | | Sectional Title | 1 | 0.004 | 0.0044 | 10% | | State | 1.5 | 0.006 | 0.0066 | 10% | | Vacant | 4 | 0.016 | 0.0176 | 10% | | Residential Property with Consent Use | 2 | 0,008 | 0.0088 | 10% |
Rebates
| Description | Rebate | | | | | Residential Properties | First R150 000 of value | | Phase in | | | All properties levied for the first time | 50% | | Pensioner owners where gross monthlyhousehold income is lower than R5 300 | 100% | | Pensioner owners where gross monthly incomehigher than R5 300 but lower thatR9600 | 50 | | Sectional Title Residential | 20% | | Heritage Sites | 20% | | Organisations with purpose of Animal Protection | 100% | | Primary and secondary Schools | 50% | | Technical Colleges | 20% | | Universities and Tertiary Education Facilities | 20% | | Public Benefit Organisations | 100% |
Water
| 1. Domestic / Prepaid Water & Sanitation | Increase | | (a) | 7to10kl | 5,8% | | (b) | 11 to 15 kl | 8,8% | | (c) | 16 to 20 kl | 10,8% | | (d) | 21 to 30 kl | 11,8% | | (e) | 31 to 40 kl | 12,8% | | (f) | +40kl | 13,8.% | | | | | | 2. Institutional & Industrial/Commercial Water | Increase | | (a) | Up to 200kl | 12,8% | | (b) | +200kl | 13.8% | | | | | | 3. All other tariffs | 12.8% |
Domestic Refuse
| Property value | Increase | | | | | < R 150 000 | free | | R 150 001 – R 300 000 | 8,5% | | R 300 001 – R 500 000 | 8,5% | | R 500 001 – R 700 000 | 8,5% | | R 700 001 – R 1 500 000 | 26% | | > R 1 500 000 | 22% |
19/05/09 : The Inflationary Property Rates Act The intention of the new Local Government: Municipal Property Rates Act 6/2004 (the Act) is to complete the implementation of statutes and regulations that facilitate the administration and operation of our inclusive cities and towns.
The Act significantly enlarges the revenue base, increasing the pool of rate paying properties whilst at the same time the poorest members of our property owners are able to utilize the statutory R 15 000 exemption for their residential properties, theoretically holding the cost to the rate payer at parity with the rates payable in terms of the repealed ordinances.
In reality, the cost after implementation of the act has been inflationary for a variety of reasons:
- Computer Aided Mass Appraisal (CAMA), which is still in its infancy, resulted in many valuation rolls reflecting generally unreliable values.
- Categorisation of land use which is used in determining the appropriate rate also has a high error rate.
- Budgets are supposed to pre-determine the municipalities’ revenue and expenditure and therefore set the appropriate rate. The amount of income from property tax is based on different rates for residential, income producing, mixed and special use categories. These different categories are inaccurate and as a result the rate is not determined accurately.
- Ratios are set to minimize or maximize the property tax paid by the residential, income producing and other use categories of property. These ratios are published without reference to the values, resulting in inflated property tax leading to objections, appeals and litigation.
Any new system takes time to bed down and the Act is a case in point.
All of the above has become highly inflationary and the situation is compounded by the date of valuation preceding the global collapse in values.
I call for the appointment of a Property Rates Ombudsman to assist beleaguered municipalities expedite corrections to a very complex system.
See the related article on the RealEstateWeb 17/03/09 : Valuation Objection Price Structure 2009 The general valuation rolls for Ekurhuleni Metropolitan Municipality and Mogale City Local Municipality are currently open for public inspection. The deadlines for handing in valuation objection forms are as follows:
Ekurhuleni – 17 April 2009
Mogale City – 28 April 2009
PHASE 1: Take-on, Desktop Valuation and Recommendation
Residential R 3,200 (inclusive of VAT & disbursements) 10% discount for 3 or more contiguous properties
Commercial R 5,400 (inclusive of VAT & disbursements) 10% discount for 3 or more contiguous properties - General valuation roll entry
- Location map
- Title deed extract – verification of property description, registered owner and extent
- Zoning certificate – existing land use vs town planning scheme and controls
- Comparable sales statistics
- Existing improvements schedule
- Potential use – applications and/or management district approval
- Regional spatial development framework and community support
- Desktop valuation and validation of municipal value
- Report and recommendation to owner (1 page)
PHASE 2: Valuation Objection (if requested and required)
Residential R 1,700 (inclusive of VAT & disbursements)
Commercial R 2,800 (inclusive of VAT & disbursements) - Fill out valuation objection form
- Deliver to Valuation Department
PHASE 3: Property Inspection & Full Valuation Report (if requested and required)
Ad Valorem less R 3,200 (or R 5,400) paid for Phase 1 (inclusive of VAT & disbursements) | Value of Property | Fee | Fee less R 3,200 | | | | up to | R 1,000,000 | R 5,350.00 | R 2,500.00 | | From | R 1,000,000 | to | R 5,000,000 | R 9,950.00 | R 7,100.00 | | From | R 5,000,000 | to | R 10,000,000 | R 17,950.00 | R 15,100.00 | | From | R 10,000,000 | to | R 25,000,000 | R 27,950.00 | R 25,100.00 | | From | R 25,000,000 | to | R 50,000,000 | R 39,950.00 | R 37,100.00 | | From | R 50,000,000 | to | R 100,000,000 | R 51,450.00 | R 48,600.00 | | | | over | R 100,000,000 | on request | |
PHASE 4: Valuation Board Appeal Hearing Representation (if requested and required)
R1,000 hourly rate (inclusive of VAT & disbursements)
COMMENCEMENT OF ASSIGNMENT
We will commence with your desktop valuation upon an initial payment of R 3 200 (or R 5 400), together with the documentation required as detailed below and the respective deposit slip / confirmation of payment to be received before 9 April 2009. Your further account will be processed upon the completion and delivery of each phase of the assignment.
DOCUMENTATION REQUIRED
1. Current assessment rates account
2. Building plans – as-built, to scale or with dimensions shown
3. Any pending town planning applications (rezonings, subdivisions)
Please do not hesitate to contact us if you should require a formal quotation.. | | | | | | | | | |
