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What is all the fuss over the Municipality valuation roll?
08 May 2020  | Keabetswe Teo
 

Why should I be concerned over how much the Municipality has valued my property for?

 

Simply put, you pay property tax based on the value of your property. If you do not object to the valuation as stipulated in the valuation roll before 30 April 2021, your valuation will be deemed to be correct and your property tax will be calculated on that value for the next 4 years.

 

Will the difference in the property tax, justify the costs of objecting thereto?

 

In order to answer the above, do a quick calculation by following these easy steps:

1.      Confirm the new value of your property as stipulated on the valuation roll.

Click here to download and view the Municipality valuation roll.

2.      Find your property and compare the new value to what you think your property is actually worth.

3.      Multiply the two values with the following factors to calculate the yearly tax rate of your property:

Residential: 0.0072

Business: 0.0269

Industrial: 0.0274

Agricultural: .00019

 

For example: your house is worth R1 000 000.00, but is valued for R2 000 000.00.

Difference is (R 1Mil *0.0072) R7 200    - (R2 Mil*.0072) R14 400 =R7 200

You are therefore going to pay R7 200 per year more property tax on your property if the property is overvalued with R 1 mil.

 

If I am going to pay much more, how do I object?

 

An objection to the municipal value of your property should be filed in terms of a procedure as prescribed by legislation.

Should your objection not be upheld, an appeal may be lodged to a valuation appeal board.

It is recommended that a proper valuation of your property from a professional  valuator be obtained to successfully prevent the overvaluation of your property.

You can obtain a prescribed objection form from the municipality and build your own case with supporting documents including a valuation, lodge the objection and then appear in front of the valuation appeal board if required, or

You can instruct us to do everything.

For R2850.00 (for a residential property) we will have your property valued by a registered and professional valuator, file your objection and submit an appeal to the valuation appeal board if needed. Should a hearing before the valuation appeal board be required, we will negotiate with you for a further appearance fee.

 

Are there any other factors to consider?

 

Yes, should you sell your property the purchaser will have to pay transfer duty. SARS calculates the transfer duty on the market value that is either the purchase price or the municipal valuation, whichever is the highest.

As an example:

If you sell your property for the true value of R2 mil, but the municipal value is R3 mil, the purchaser will have to pay transfer duty calculated on the highest being the municipal value.

Instead of paying R50 250 transfer duty on R2 Mil, the purchaser will have to pay R146 000 on the value of R3 mil.

A difference of R95 750! You will have to prove to SARS that the municipal value is inflated, which is not always easy.

 

Conclusion

 

If you want to save on unnecessary expenditure, you have only until 30 April 2021 to object or be contend to pay substantially more for municipal rates and taxes for the next 4 years.

 

For more information follow the link;

https://dupwest.myshopify.com  or contact Keabetswe Teo on

Email: keabetswe@dupwest.co.za

Direct line: 014 523 4600

 
 
 
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Tags: Tax