21 Feb 2022

Property owners in eThekweni Municipality urged to examine new recently published property valuation roll open for inspection and objections

by David Warmback, Partner, Durban,

The eThekwini Municipality has  published its fourth general valuation roll (GV 2022) since the promulgation of the Local Government: Municipal Property Rates Act, 2004 (the Rates Act). Owners have a limited period within with to examine the roll, and if required, to submit an objection to such valuation.

Property rates are a major expense for owners of immovable property, and it is essential that owners are satisfied that the value placed on their property by the Municipality is correct, as such value, and the associated rates payable thereon, will apply for the following 5-year period until 30 June 2027. The date of valuation has been determined as 2 July 2021 and the new valuation roll reflects the market value of properties, as determined by the Municipality, that applied at that date.

It is not only owners which will have an interest in the new valuation roll, as certain tenants may also be affected by this. Many leases, specifically for commercial and industrial properties provide that the tenant is liable to reimburse all property rates to the landlord relating to  the premises leased, or alternatively be liable for all increases in rates on a yearly basis from the commencement date of the lease.

The Rates Act obliges municipalities to undertake a general valuation of properties within their jurisdiction at least once every four years. Where the market value of a property is R900 000 and the cent amount in the Rand is R0.008 (0.8 of a cent), then the property rates will be R900 000 x R0.008 =R7200 per year being R600 per month. The first valuation since implementation of the Rates Act was done in 2008 followed by the second in 2012, and third in 2017. The Rates Act introduced some important changes in the way municipalities rate properties, including ceasing providing separate values allocated to land and buildings, the introduction of separate rating of sectional title units, and the adoption of the principle that the market value is the amount the property would have realised if sold on the date of valuation in the open market by a willing seller to a willing buyer.

The actual rates payable by an owner to the Municipality is not determined solely by the valuation of a property in the valuation roll, but also by a rate randage being a cent amount in the Rand which is then multiplied by the property value. If your property value increases by say 15%, this does not necessarily mean that your rates will increase by the same percentage. The amount of the rate randage or tariff is determined  and published each year by the Municipality.  Different tariffs apply to different rating categories. The total amount of rates collected each year is part of a budgeting process by the Municipality, which budget generally increases around the inflation rate each year.

The Municipality does have access to a lot of information relating to properties within its jurisdiction, including deeds office statistics reflecting property transfers with actual sale prices, building plans and details relating to alterations and upgrades to properties, geographic information systems and aerial photography information obtained from previous inspections. Physical inspection of all properties in the Municipality is not practical, affordable, nor required by the Rates Act, so valuers do apply some averaging in the process.

The GV 2022 rates roll, which will be in effect from 1 July 2022 to 30 June 2027, and which contains some 560 000 entries, is currently available on the eThekwini Municipality website, www.durban.gov.za, more specifically under the “Online Tools” section and “General Valuation” athttp://www.durban.gov.za:8000/propertysearch.htm. It is also available at Sizakala Customer Centres and the Real Estate Offices at 5th floor Embassy Building, 199 Anton Lembede (Smith) Street, Durban​. The Municipality will also be obliged to post a “Section 49 Notice” to all property owners, which notice will include an extract from the valuation roll that contains the relevant information on a property, including the property description, address, usage, category, extent, and market value.

Owners have until 31 March 2022 to examine, and if required, lodge an objection, not only to the new valuation, but to any of the other items in the roll  that may not be correct. An owner must complete a standard objection form obtainable from the venues referred to above, or from the website (http://www.durban.gov.za/Online_Tools/vroll/Pages/How-to-download-section-49-notice-and-objections-form.aspx), complete it and submit it with any supporting documents to the same venues, alternatively it may be transmitted by email to Objectionand.Appeal@durban.gov.za.

It is important to note that an objection must be lodged against an entry in the roll and not the valuation roll as a whole. Once an objection has been lodged, it is referred back to the municipal valuer who will review the valuation in the light of all information provided by the objector. The objector will be informed in writing of the outcome of an objection and will have a right to appeal that decision, if unhappy with the initial response. If the municipal valuer accepts the objection an adjustment will be made in the roll, unless the adjustment is more than 10% down or up, in which case the objection must be referred to an appeal board first.

Owners should be careful about submitting frivolous objections which have little substance as lodging an objection does of course put a spotlight on the property, and the valuer, and if applicable, an appeal board, will re-consider whether a property is in fact over or under valued. Having said that, with so many properties on the roll, there are likely to be genuine errors, including values which are may obviously not be market related. A general valuation is unlikely to be totally complete and accurate, and properties may be accidently omitted from it, only come into existence after the roll is published, have had alterations and additions effected, or are incorrectly categorised.  In these instances the Rates Act provides that a municipality must publish a supplementary valuation roll at least once every year for the duration of the general valuation.

It should be noted that the Rates Act specifically provides that the lodging of an objection or an appeal does not defer a person’s liability for payment of rates beyond the date determined for payment, so owners must continue to pay the rates based on the new roll until there is a final outcome on the objection, and if applicable, the appeal process.

Some useful frequently asked questions are available on the eThekwini Municipality website at this address: http://www.durban.gov.za/Online_Tools/vroll/Pages/faq.aspx

For further information on the GV 2022 valuation roll, including assistance with the objection process, please contact, David Warmback at 031-5757409  or warmback@wylie.co.za.