Scrap property valuation for 2 years
Grant Easton writes:
Being a ratepayer who wishes to be well informed about municipal matters I decided to read the budget documents prepared and approved by our council recently. They are the usual pretty boring drivel of trying to paint a rosy picture in an area where it is technically impossible to do very much and where it would require massive financial injections from somewhere to do anything meaningful. So it’s the usual apple pie and ice cream. Then I got to the bit near the end:
“I must point out that assessment rates will be based on the new general valuation (GV) roll which comes into effect on July 1, 2017. The new valuation roll was compiled by an independent consultant in accordance with the requirements of the Municipal Property Rates Act 2004, which resulted in all properties in Knysna being revalued based on their individual circumstances.
“This has resulted in many properties going up in value and many going down when compared with the previous valuation role. Therefore, although the total revenue from assessment rates is projected to increase by only 6% (which is less than inflation), the increase or decrease in rates for any individual property may vary considerably from the general 6% increase.”
NO ‘INDEPENDENT CONSULTANT’
The “independent consultant” bit is just nonsense. In Knysna’s case they go to tender to appoint a valuer, who is then appointed as the municipal valuer. The “independent” bit is there to give council the ability to say, “Don’t blame us”. In bigger municipalities the valuer is a full-time official of council. Then “many properties going up in value and many going down”, “the increase or decrease in rates … may vary considerably”. You bet it will. My increase is 32.8% and I live in Old Place!
GVs are about incidence shifts, ie which areas are valued more and rates modelling. Call me old-fashioned, but when I did this we gave council details of the incidence shifts and we then roadshowed them to the public. I still have cold sweats about the rates meeting which nearly 300 irate ratepayers attended – no politicians in sight. I am sadly not aware of either of these things happening this time around.
This smacks of the old-style backroom council approach that Knysna had left far behind. I say this because the rates increase seems to me to be too easy. The rate in the rand has nothing to do with the property value. It is merely a device to calculate and extract the tax that the council requires to balance its books, or more likely, in this instance, make a fat surplus. Elsewhere in the speech the mayor announced that B&Bs are now rated as domestic. How much rates is that costing and who is paying it? The answer, of course, is that I am. As an aside, council has finally admitted that Knysna is a tourist town. A decade ago the DA was still arguing that B&Bs should be charged as full businesses if more than two bedrooms were advertised. We are what we are.
The Rating Act and indeed our rates policy allow for rates differentiations. For many years councillor Elrick van Aswegen wanted us to differentiate on the basis of area, for historical reasons. This council has, by extension, just allowed rates differentiation but based on usage. Interesting to see where that will end.
I have avoided writing about the fires and the impact that it will cause on the rates base of the town. I would urge anyone, if their house was touched or affected by the fire, to put in an appeal to the valuation appeal board.
This is a fully independent board who examines each case on its merits. Valuers will probably tell councillors and officials, who will then tell you that only those properties directly affected can appeal. They will try to come up with criteria. All of this is nonsense. If you are in an area where the houses on either side or across the road have burnt then your value will have been affected. So appeal. It is very probable that council will endeavour to keep the new GV as intact as possible. At this time this is ridiculous. They should scrap the whole thing for two years and then redo it. That would be leadership.
The mayor said that the increase is “projected to increase by only 6%”. That means the GV implementation is not relevant at this point. Council should therefore look at their powers, approach the MEC if necessary, and postpone the implementation of the new roll.
If you want to do your rates sum, it is very easy. Take your present value and subtract 100 000. Multiply the amount remaining by the rate in the rand and then subtract 10%. The balance is what you pay, either annually or monthly. Compare what your rates are now to what you will pay. Then compare it to the 6% the mayor uses as the “general” figure, but don’t forget you are now subsidising the B&Bs!