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Johan Ferreira has been successfully involved in rectifying municipal values through the valuation court for many years. His valuations have been used with success in Supreme Court cases. Ref - Local Government: Municipal Property Rates Act, no 6 of 2004. The relevant - sections that deals with what happens if you are overvalued and thus subsequently over charged is clause 55b and chapter 8 section 78 clauses d,e and f.
Inflated municipal valuations are financially draining an already struggling consumer further
Municipal valuations should be by Law based on similar comparative properties sold and transferred,
this means you should compare apples with apples. The asking price of a property is totally irrelevant. Similar means you can't compare a single residential home with a flat, or with a home 2km from the ocean with one on the beach. You must compare properties with similar position, condition, character, quality and usage (zoning).
The problem is that certain municipal valuers don't take the average value of similar comparative properties; they take the top end value and ignore the rest.
The average sales price of similar properties should be calculated by using the broad average not just the convenient high sales. There are many benefits when valuations are inflated none of which favors the rates payer. The municipality would benefit from increased rates income and the valuer would benefit from increased income if he is paid a percentage of the value.
The way the rates and taxes are calculated is by multiplying property value with a factor.
This factor is also capped by law so you can't increase it indiscriminately beyond reason thus the only other option is to increase municipal property values.
Most people think they understand how to object so they try and do it themselves but you need experience to stand up in court and object with substance. In many cases it's like taking a knife to a gun fight because the rates payers don't have the knowledge, experience and resources to successfully counter an argument with conviction using the relevant information.
Despite the fact that most people are aware they getting overcharged they don't do anything.
One reason is they don't have the time as it does take time so they turn a blind eye. Further it's also difficult to get the necessary co-operation, there's a long dragged out process to get justice. Many rates payers are misled when they want to object, they get told that they must wait for the next general valuation which is totally untrue according to the law.
My experience is that in our area, the municipal values is between 50% - 100% more than market value. This have far reaching implications , one is when a property is sold below municipal value SARS query the sale and request alternative valuations this causes unnecessary complications and delays. It also wastes time and money.
The other problem is that sellers of property use the municipal value as a guide when they decide on a selling price this usually leads them into a dead end of no success.
Finally according to Municipal Property Rates Act, no 6 of 2004.
The relevant - sections that deals with incorrect valuations is:
Chapter 6 - clause 55 b and
Chapter 8 - clause 78 d,e and f.
According to this law if you are over charged you must be refunded from the date the overcharging took place.
If ratepayers start taking action in terms of this law the cat would really be amongst the pigeons but I wish this would happen so that we can force municipalities to give value for money services.