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How to prevent exorbitant property rates and taxes

Homeowners are being advised to obtain accurate valuations of their homes ahead of municipal property valuations which will ultimately affect rates and taxes.

Homes are re-valued every four years which usually culminates in property rates changing. Owners can expect to receive their new property values in February 2013, including the new property rates effective from July next year.

Director of Jawitz Properties, Francois Venter, says there are several ways of going about getting your home valued effectively.

One is through Lightstone Property which provides data, including property valuations and related statistics to the property industry. This includes professionals like estate agents, developers, mortgage originators and the homeowner or home seeker.

Venter says owners can also make use of several websites that provide services in this regard, but he adds the most trusted method is to work through an estate agent. Some estate agents offer this service free of charge.

Comparative Market Analysis is another accepted method that is often used by estate agents themselves to determine market value, the strength of the local market, demand and supply and the sale of other similar properties in your area.

Venter warns that municipal valuations are often inaccurate sometimes by more than 20% of the actual value.

He says: “Homeowners tend to think these valuations are conclusive and want to use them as a basis for determining a price for their homes. However, more often than not the council valuation doesn’t reflect the true market value of a property. And far from being something to cheer about, a higher valuation simply means they will end up paying higher property rates.”

Venter adds that homeowners will have time in March and April next year to contest the municipal valuations and prevent having to pay inflated rates and taxes for the next four years.
“Homeowners should consult an estate agent before it’s too late. Failing to respond will mean that the given municipal valuation won’t change, and for the next four years the revised property rates will have to be paid.”

Venter says in Cape Town, the city council has been working closely with professional valuers, data collectors and statistical analysts since 2009, to deliver on the so-called GV2012 project.
This will determine the municipal values of homes and the property rates that should be paid. A document known as the General Valuation Roll containing this information will be released and certified in January 2013.

Venter says 800 000 homes within the city of Cape Town have already been valued using a computer-assisted mass appraisal system to ensure fairness. But, he says these valuations may not be entirely accurate and the best option would be to enlist the help of an estate agent.

(Moneyweb)


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