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STATEMENT BY COUNCILLOR JOHAN VAN DER MERWE, THE CITY’S MAYORAL COMMITTEE MEMBER FOR FINANCE

The City’s next general valuation (GV)is under way. The GV assessment is based on market prices and is not speculative. Read more below:

The GV roll assesses approximately 870 000 registered properties in Cape Town and is conducted for the purpose of billing fair rates to each property owner.

The City does not make a profit on rates. We determine how much is needed for shared services for all who live in Cape Town.

The value of an individual property is not the basis for the amount of rates income that is collected by the City as a whole. The main factor is the City’s budget. As an example, if we require R6 billion of rates income to ensure that our City operates efficiently and sufficiently, the valuation roll serves as the basis on which we calculate the rate-in-the-rand or the applicable property tax rate. We also calculate what rebates should be made to the vulnerable in our society and see how we can apply the rates in the most affordable manner for our ratepayers.

We also do not raise more than what is needed from rates. That is why you will find that the rate-in-the-rand can decrease after a new general valuation roll is implemented.

What is the money used for?The money that is raised goes toward shared services such as fire services, the installation, maintenance and operation of traffic and street lights and providing services that stretch across neighbourhoods. It also helps us to help our most vulnerable residents.

In return, we provide arguably some of the best services of any metro in South Africa. This has been evident even during the past year of extreme crisis, which has included the unprecedented drought that we as a City, in collaboration with our residents, have had to deal with largely on our own. In addition, we also experienced the largest humanitarian crisis which we have ever faced when approximately 10 000 people in Imizamo Yethu were displaced after a large fire devastated the area just over a year ago.

Valuations based on sales, not speculation

Valuations are based on actual property sales that have taken place in the open market around the date of valuation for each particular area. The attributes of different areas are considered when reviewing the market values.

How it works

The City chooses to conduct a GV every three years. By law, we are required to do so at least every four years but we have chosen a shorter timespan in an effort to mitigate major shocks to ratepayers. The last general valuation in Cape Town was conducted in 2015 (and implemented on 1 July 2016). The new valuation roll will be implemented as from 1 July 2019.

The City’s Municipal Valuer is responsible for producing the GV roll and is assisted by professional valuers, statistical analysts, data collectors, and support staff.

The valuation staff collect and review sales that take place around the date of valuation.
The sales data is used in the Computer-assisted Mass Appraisal (CAMA) system.
CAMA system is used by valuers to value properties in Cape Town, taking into consideration the various attributes and characteristics of various neighbourhoods within the metro.
To ensure fairness, the GV roll is audited by an independent body – the GV2015 was audited by the International Property Tax Institute.

Avoiding shocks

The Western Cape in general, and the metro in particular, has experienced major increases in house prices. Rates are collected for services that are not funded by tariffs. To avoid a rates shock due to these property price increases, it is best to ensure that valuations are kept up to date as far as possible.

Property owners will have the opportunity to inspect the GV2018 roll as from February 2019.

Please see more information on how the General Valuation works here: http://www.capetown.gov.za/work%20and%20business/commercial-properties/property-valuations/general-valuations

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