A recent attempt to reduce the payments towards rates and taxes to Nkomazi Local Municipality by Leopard Creek Golf Course & Estate was unsuccessful when the Valuation Appeals Board ruled the property to be worth R906 million, reports the Lowvelder.
Nkomazi’s valuers appraised the property to be worth this amount. Leopard Creek’s rates are determined in accordance with it. However, Leopard Creek Share Block Limited, the owner of Leopard Creek Golf Course & Estate, appealed this amount. They argued that it was valued at less and that the luxury estate should pay municipal rates and taxes in accordance with the lesser valuation.
Its legal counsel argued that Leopard Creek is owned by a share block company and homeowners are shareholders in the company, not traditional property owners. It argued that only the parts of the property belonging to the company, such as the golf course and other recreational facilities, could be valuated for purposes of rates and taxes. The rest, however, were shares.
Leopard Creek’s legal team further contended that its shareholders’ rights were an encumbrance on the property similar to a usufruct or servitude where the purchaser has limited use of a property.
If the board accepted Leopard Creek’s valuation, it would have paid lesser amounts towards rates and taxes. Its shareholders, in turn, would benefit from a lesser pro rata payment due to Leopard Creek.
Presiding officer Mr Mdu Singwane set aside their appeal during a recent Valuation Appeals Board hearing. He rejected Leopard Creek’s argument.
Singwane explained that the nature of Leopard Creek as a share block did not amount to an “encumberance” for the purposes of valuation. He stated that such a conclusion would not have been legally justifiable.
The municipality’s legal team welcomed the decision. “The practical impact of the ruling is that owners of shares in a share block company, like Leopard Creek, are being treated no different from owners of full title or sectional title properties, as far as the basis of valuation is concerned,” said Adv Allen Liversage.
– Caxton News Service