PROPERTY: Prepare For Next General Valuation
Recent Western Cape Business News
The City of Cape Town says it is preparing for the next general valuation of all properties in the metropolitan area. The proposed date of the new valuation is 01 July 2009. This means that the valuation must reflect the market value of properties as at that date.
In terms of the Municipal Property Rates Act of 2004, the general basis of valuation is the market value of a property. This is defined as 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. This general valuation will therefore reflect market values as at 01 July 2009. This general valuation will be implemented on 01 July 2010.
As in the previous general valuation, this one will make use of Computer Assisted Mass Appraisal (CAMA) technology. This is a more cost efficient and resourceful approach to valuations, making it possible to carry out mass property valuations in a short period of time.
Most of the data required for this approach is already available on the City’s property database. Selected properties will be revisited and data collected.
Residents will be kept informed through various media on the progress being made.
An exercise of this magnitude is not without its problems, not least of which is obtaining accurate market data (i.e. income and expense information) to be used in the valuation of commercial and industrial properties.
In the past, all properties were physically inspected by registered valuers. However, given the large number of properties (in Cape Town’s case approximately 780 000) and the frequency of general valuations, it is no longer possible to follow this route.
Legislation allows for the use of Computer Assisted Mass Appraisal (CAMA) techniques – loosely described as the determination of values using a variety of statistical methods – to produce market values. This technique uses existing information currently on the Valuation Department’s database, but it is also dependant on up to date market information in order to generate accurate values. The quality of these values is in turn very sensitive to the accuracy of data.
For this reason, the City has mailed questionnaires to approximately 17 000 commercial and industrial property owners. The returned market data (which will be treated with the utmost confidence) will not only go a long way towards determining more accurate valuations, but should also reduce the number of owner objections which, in the past, has been a protracted process, lasting more than a year.
More up to date data will also assist the City in addressing equity concerns.
Lastly, the City says it wants to point out that it is a civic responsibility for owners to return their completed questionnaires. Furthermore, the legislation enables the Valuation Appeal Board to award costs against owners in cases where information is held back and only submitted when such owners wish to argue their case before the Valuation Appeal Board.
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