If you own property in Johannesburg, it's important to act fast. The extended deadline of 5 May 2023 to object to municipal property valuations is quickly approaching. This presents a crucial opportunity to ensure that your valuations are accurate and fair, as higher municipal valuations can result in significantly higher property rates and taxes. Taking advantage of this extended objection period is essential in participating in the democratic process and making your voice heard.
With the Governor of the South African Reserve Bank announcing the ninth interest rate hike since November 2021, the cost of borrowing is the highest it has been in 13 years, placing South Africans under severe financial strain. For property owners, the latest interest rate hike means that the repayment on a home bonded at ZAR1 million, for example, has increased by 35%, from ZAR7 753 to ZAR10 493 per month, which undoubtedly leaves a huge hole in homeowners' pockets.
To make matters worse for Gauteng-based property owners, property taxes are also expected to increase significantly in the second half of 2023, unless property owners make their voices heard in the latest call for public comment on the new proposed property valuations.
On 15 February 2023, the City of Johannesburg ("COJ") published the Fourth General Valuation Roll 2023 (the "2023 Roll") and opened the 2023 Roll for public inspection and objection. While the original objection period ran from 15 February to 31 March 2023, it has since been extended to 5 May 2023, and residents are encouraged to view, inspect and if necessary, object to their new property values online. The 2023 Roll has a valuation date set for 1 July 2022, meaning that from that date, the properties are valued at the rates provided in the 2023 Roll , and the property rates based on these valuations will be billed to ratepayers from 1 July 2023.
The 2023 Roll values total property in the COJ for the term 2023 – 2027 for the 934 652 properties at ZAR1.5 trillion, a 12% increase since 2018, when the last Roll was published. The property valuations on the 2023 Roll are, in most cases, significantly higher than the real property values, which, in some cases, results in property taxes being more than 100% higher than what is currently charged. Importantly, the 2023 Roll also proposes a 4.5% increase in the property rates charge from 01 July 2023, making property rates less affordable for many property owners in the city.
This increase in property valuations is important because the COJ determines property rates and taxes based on a 'rate-in-the-rand' system. Therefore, the higher the valuation of your property, the more the property owner is expected to pay for property rates and taxes. As such, where there is a huge discrepancy between the municipal valuation of your property and the actual value of your property, this will not only affect the rates and taxes charged on one's property (which, in some cases, can be 100% higher than what is currently charged) but will also affect future sales values for properties.
The importance of the public participation process
Under the Constitution and the Promotion of Administrative Justice Act, 2000 ("PAJA"), everyone has the right to be informed and consulted about any public decision. This right to consultation means that the government, in this instance the COJ, must provide adequate notice as well as an opportunity to make submissions before they take any action. After considering the submissions, the COJ must decide whether or not to impose the increased municipal valuation.
As such, PAJA breathes life into the Constitution's vision of participatory democracy in South Africa and ensures that people who are affected by state action and the exercise of public powers and functions are involved in making the decisions which will ultimately impact them.
The objection process
Any person can object to an entry on the Valuation Roll. The objection must be submitted online via the City of Johannesburg's website or at one of the 13 designated walk-in centres in Gauteng. The 2023 Roll will be available for public comment in the Provincial Gazette until 05 May 2023.
If no objections are lodged by the closing date, the new property valuation rates and taxes will be implemented from 01 July 2023. All objections will be considered by the Municipal Valuer who will notify any objectors of the outcome in writing. Where the objector still disagrees with the outcome of the valuation, an appeal can be lodged. The objection outcome notice, also called a section 53 notice, should indicate the period in which to lodge an appeal, where appeal forms can be collected and any further details.
Once the inspection, objection, and appeal phases have been completed, the determined property values will be used to calculate the property rates with which ratepayers will be expected to comply.
With the deadline for objections to the Fourth General Valuation Roll 2023 by the COJ fast approaching, property owners are urged to act urgently. The current economic climate, with the recent interest rate hike and anticipated property tax increases, has placed significant financial strain on South Africans. This makes it all the more important for property owners to ensure that their valuations are fair and accurate, as the higher the municipal valuation, the more they will be expected to pay for property rates and taxes.
Property owners must understand their rights and ensure that their valuations are accurate and fair, and are encouraged to check the valuations of their properties here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
