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Friday, July 20th, 2018
It’s VITAL that you check your property valuations!

It’s VITAL that you check your property valuations!

Be First!
by February 20, 2018 General, MX40, News

VITAL CHECK IN BRIEF: You have until Friday 6 April 2018 to lodge objections to the valuation of your property!

If you have not yet received your new property valuation notice by email and/or post, then you can click here to view it online.

Why it’s important to check it

  • Every R100,000 increase represents approximately R60 extra on your rates bill!
  • If your valuation is too high, then you can submit a formal objection ONLINE or via a Revenue Walk-In Centre.
  • You have until 6 April 2018 to object.
  • The new rates will kick in on 1 July 2018.
  • This is the monthly rates charge that you will be paying for the next 4 or 5 years, so it is worth objecting to if it is not accurate.

 

How it works

According to DA Cllr Tim Truluck, you can work out how much extra you will be paying by doing the following:

  • Look at your rates bill to determine your old rates charges and the number that CoJ uses to calculate it (in most cases it will be 0.007345 for residential properties).
  • If your property was valued at R2 million, then your monthly rates bill will be R2 000 000 less R200 000 rebate: R1 800 000 x 0.007345 divided by 12 = R1101,75.
  • If your property has increased by 50% to R3 million, then your new rates will be: R3 000 000 – R200 000 = R2 800 000 x 0.007345 divided by 12 = R1713,83 (55.6% increase).
  • Note that the rates usually also go up by about 6% every year, so you will probably be paying R1816,66 after 1 July.

 

A Case Study

Cllr Truluck uses his own house as an example of how he will go about objecting to its valuation:

“My house in Parkhurst has increased in value from R2.22 million to R3,438 million. When it was valued in 2013, I thought it a little high, but on the whole pretty accurate and so didn’t object. It soon went up to beyond that, but then stagnated.

Following my own advice in a newsletter, I obtained a property valuation from an estate agent last June for R2.5 million. If my new valuation was around R2.5-2.8 million, then I probably wouldn’t bother objecting. But it is way too high, so I will be objecting and will talk you through what I will be doing. If successful, it will save me +- R600/month or +-R36 000 over 5 years.

The appointed City Valuer has had to revalue almost 900 000 properties in Joburg. They do this by primarily looking at aerial photos and property sales in your neighbourhood. I would say that this is more heavily weighted towards property sales than aerial photos and they probably use a formula that works out the average of the recent sales near you to get a likely value range within which your property sits.

So you need to find out what that range is. Given that the valuer used a property value algorithm, you need to find one too. There are quite a few on the market – I used www.propiq.co.za (no, they are not paying me anything). The valuation report cost R95  and it provided a very comprehensive report upon which I am basing my objection.

From this report, PropIQ worked out that my estimated value was R3.2 million with an estimated high of R3.65 million and a low of R2.56 million. Note that they have not visited my house – this is just a thumbsuck based on sales and a few other factors in the area.

I now have to prove that my property is at the lower end of this this value range. To do this I have:

  • A valuation from an estate agent dated 27 June 2017 for R2.5 million;
  • I will be getting another valuation from a different estate agent this week. Am holding thumbs it is not high.
  • I have compiled examples of properties in Parkhurst in the R2.5-2.9 million and R3-3.5 price range from the 18 Feb 2018 Sunday Times property section (you can probably do this via online property sale sites). This shows the difference between the two price ranges. My house fits more into the R2 million descriptors of “charming, well-maintained, solid, good bones, great opportunity, neat kitchen” than those of the properties in the R3+ million range: “offering privacy, lovely home, sense of space, abundance of positive energy, open plan, clever choice for an easy lifestyle, stylish renovation, spacious.” I will use this in my objection letter to show that my house should be in the upper R2 mill category.
  • From the PropIQ report, it shows that there has been an increase in average annual property prices from R2.48 million in 2013 to R3.2 million in 2017. What is notable is that there was a big jump in average prices in 2014 to R3 million, but since it has hovered around the R3.1 to R3.2 million mark. This shows that the market is stagnant.
  • The increase in the annual average price from 2013 to 2018 is R723 000 or 29.2%. Given that my house hasn’t had a major renovation in that time, and given the municipal valuation of R2.22 back in 20112/13 was a fair reflection of it’s value, a 29.2% increase should equate to a valuation of R2.87 million – which is much lower than the 2018 Valuation Roll of R3.438 million. This is more in the ball park of what the house is worth.
  • The PropIQ report also lists the number of sales per year. In 2013 there were 196 sales of houses in Parkhurst. This has steadily dropped to 138 sales in 2017, the lowest since 2013. This is thus an indication that the market has been declining.

 
I am not an economist or a financial guru. I am like you. But I think the above should be enough to justify that my house is not worth R3.438 million. It didn’t take me long to do, cost R95 for the PropIQ report and R23.50 for the Sunday Times.

I will be submitting it after Tuesday 20 Feb – I hope it will be ok to do it online. But if not, will be going through to the Randburg Walk In Centre on cnr Jan Smuts and Braam Fischer.”

Action point:

Click here to view your valuation online.

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