Tshwane house valuation: From R930k to R11m!

A property owner in Wonderboom South, Pretoria, got the shock of his life when he recently received a notice from the City of Tshwane stating that the single residential house where he has been living since 1992 has been valued at R11 million, up from the current R930 000.

Wonderboom South is a middle-class suburb in the Pretoria Moot with big plots and lots of trees. Selling a house for R11 million in this area would be a rarity.

The owner, who asked to remain anonymous, says he has not made any big improvements that could justify the increased valuation.

“I believe it is a mistake. They might have added one zero too many,” he says. “My neighbour’s new valuation is R1.1 million.”

Another Tshwane ratepayer and Moneyweb reader wrote on condition of anonymity: “I bought my house just over 5 years ago in Sinoville Pretoria (a very average neighbourhood) for R1 170 000. My City of Tshwane account values the property at R1 100 000. However, the proposed valuation (on the new general valuation roll) is R1 500 000! An increase of over R300 000!

“Every person that I have spoken to has a proposed valuation increase of a few hundred thousand. One lady in my office checked her mom’s property (in Lyttleton Manor) and it has gone from a valuation of R650 000 to R1 500 000! A R900 000 increase!

“Is this correct and if it is, why such a massive increase in such a short period of time?” he asked.

The reader provided Moneyweb with supporting documentation showing the different valuations.

In all cases, the owners did not make major improvements, and there are no other known facts that, in their view, would justify a drastic increase in the value of the property.

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Market value key to objections

If owners fail to object to the value attached to their properties in Tshwane’s recently published new general valuation roll, these values will stand, and they will be billed for property rates on that basis from 1 July this year.

Ben Espach, director at Rates Watch, cautions that the percentage increase from the current value to the new one does not determine the validity of the objection.

“It is all about market value – is it reasonable to expect the property could have been sold at this value – on the valuation date, which in this case is 1 July 2024?”

If the previous valuation was below market value or the market has improved significantly since then, a big increase may be justified.

On the other hand, it may be a clear mistake, with an extra zero added to the amount by mistake, Espach says.

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Vital to check valuation roll

Property owners can check the new valuation roll here to see the valuation of their property using the property description on their municipal bills.

Espach says it is important that property owners also check the category that applies to their property because that has a material impact on the amount payable to the council. The City of Tshwane bases its categorisation on the property’s use rather than its zoning.

A normal house must be categorised as residential. Smallholdings primarily used for residential purposes should also be categorised as residential rather than agricultural, meaning they would pay four times more in property rates than if they were primarily used for farming.

If an owner is convinced that the new valuation of their property is incorrect, they have until 2 May to raise an objection.

Such objection must be properly motivated. The relevant forms are available on the same website.

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Objection process

Espach says if property owners have information about recent sales in their area, they can draft their own objections. In terms of the applicable law, they will, however, have to pay property rates based on the new valuation while the objection is pending.

In the case of a clear mistake, as possible in the example of the house in Wonderboom South that was valued at R11 million, it may be impossible for the owner to pay rates accordingly while waiting for the objection process to be finalised. “Then it may be better to seek professional help to get a favourable resolution,” Espach says.

Should the objection be dismissed, there is an opportunity to appeal, and if the appeal is also dismissed, an aggrieved owner can take the matter to the court.

Alderman Cilliers Brink, who is the former DA mayor in Tshwane, said it is already clear that the revaluation process is yielding valuations that are significantly higher than in 2018 when the previous general valuation roll was adopted.

“As part of the city’s budgeting process, and because the city will clearly collect more money from property taxes, the DA will propose ways for the city council to ease the tax burden on residents. This includes a 0% increase in the respective property tax rates.”

He said currently, no tax is levied on the first R150 000 of a property’s value. “We believe that this exemption amount should be significantly higher.”

This article was republished from Moneyweb. Read the original here.