Business, property owners in Cape think their properties are significantly overvalued
Cape Town - The vast majority of Cape Town business and residential property owners believe that their properties have been significantly overvalued by the City and that the present system of determining valuations is unfair.
This is according to President of the Cape Chamber of Commerce and Industry, Geoff Jacobs.
In a survey of its membership by the Cape Chamber of Commerce and Industry, 63.2% of respondents saw the rating system as a wealth tax while only 36.8% said it was a reasonable way to raise revenue for local government.
“What surprised us most was the number of properties which our respondents said were overvalued by 100% or more,” said Jacobs. “One would expect variations of perhaps 20 % but when the 100 % figures appear then it is clear that something is very wrong.”
Nearly 61% of respondents said their business properties were overvalued while 73% said their residential properties were overvalued.
In response to the question, “Leaving sentiment aside, if you were offered the equivalent of municipal valuation for your property would you accept or reject the offer” 57% said they would accept the offer and sell their properties.
Jacobs said this was a very significant comment as it revealed the real extent of dissatisfaction with the valuations and that people had no confidence in the system. This was confirmed when more than 82% of respondents said they did not believe the computerised mass appraisal system of valuation was fair.
Jacobs said the main problem was that suburbs in Cape Town were so different that it was difficult to understand how one computerised system could be fair to all. In addition, commuting problems, congestion and local nuisance problems like noise from busy roads or danger to pedestrians could affect values.
Other comments received were that the city’s operating costs were too high and that this was the reason that valuations were so high and that the city should use a zero-based budgeting system.
Several respondents said rates should be based on the actual purchase price of the property increased every year by the inflation rate. This would eliminate the unfair way in which those who improved their properties (and their neighbourhoods) were “punished” with higher rates accounts.
Properties where valuations increased by more than 15% should be individually valued.@TheCapeArgus