Muncipal value is determined by local authorities by making a periodical survey of all buildings in their jurisdiction. Such valuation helps in charging municipal tax.
The municipal valuation is a value ascribed to your property by the Valuations Department at the municipality. It is determined based on a number of factors and the precise value is calculated according to formulae determined by the municipality’s Valuations Policy and the Local Government: Municipal Property Rates Act 6 of 2004. The municipal value is not necessarily equivalent to market value, but according to law, it should be.
The Municipal Property Rates Act is national legislation that has been introduced in order to provide nationwide uniformity, simplicity, and certainty as well as to take into account the historical imbalances and rates burden on the poor.
What is a valuation roll?
A valuation roll is a database in which the municipality stores the municipal valuations of all properties recorded on that particular roll. Every property in every municipality should be on a roll, but because properties are continuously coming into existence and ceasing to exist, new rolls are created - these are referred to as supplementary rolls - to include any properties that have not been previously recorded on another, prior, general roll.
Each general roll is re-published once every few years (4 or 5 depending on the municipality), and the property values (and categorisations) are updated at the same time. Depending on a number of factors, your property value may have stayed the same, or increased, or decreased, from the value contained on the last roll. Your categorisation may or may not have changed.
If you have received notice that your property is on a roll that is soon to be published, you should determine immediately whether you are satisfied with the municipal valuation and categorisation accorded to your property. If you are not, you will have to object.
Even if you have not yet received notice that your property is on a roll that is soon to be published, it is a good idea to determine which roll your property is listed on, and when it will be re-published in the future. This will give you an idea as to when you should be receiving notice of your revised property valuation so that you are armed with the relevant information to determine your revised value and if necessary, you have sufficient time to object. Not receiving notice does not absolve a property owner from the responsibility for inspecting the roll and objecting on time.
How to object municipal valuations
If you are of the opinion that your municipal property value is higher than the market value, you can lodge an objection with the municipality, giving your reasons. The municipality will then assess your objection, and notify you of the outcome. If the municipality finds that your objection is valid, it will revalue your property in line with your objection. If it finds that your objection is not valid, it will advise you and your property valuation will remain unchanged. You must file the objection in the prescribed time period. Most municipalities will not accept late objections.