What to pay while you wait for your Joburg valuation objection to be assessed
It could take six to 12 months for the City of Johannesburg to work through more than 40,000 electronic objections to the city’s recent valuation roll, ward 117 councillor Tim Truluck says.
Truluck has been advising concerned residents about how to object to valuations of their properties — and how to decide what amount to pay while their objections are being assessed.
Joburg mayor Herman Mashaba has said people who objected will not be affected by a revaluation until their objection has been dealt with — they "will be allowed to continue paying what they have been paying historically until the objection process is finalised".
The city will ensure no credit management processes are initiated against objectors, as long as they continue to pay rates at the previous level, along with their invoiced service charges. Their invoices, however, will still reflect the rates based on the new valuation, as the law prescribes this.
Mashaba said that "these objecting residents will not have to pay the disputed portion of their rates payments. A flag will be placed on the accounts with outstanding objection decisions to prevent debt collection action until … the objection is resolved."
Once the objection process is finalised, the objecting property owners will be required to make payment with interest, backdated to July 1 2018, for the valuation arising from the objection outcome.
Truluck noted that the R200,000 rebate threshold had been increased to R350,000 — meaning rates are not calculated on R350,000 of a property’s value.
"This means a further saving of just under R100 a month," he said.
As an example:
If a person owns a property valued at R2m and receives a new valuation of R3m, they may decide to object.
They may claim the property should be valued at R2.5m. VAT is not charged on municipal rates.
The property owner’s current bill looks like this:
R2,000,000 less R200,000 = R1,800,000
R1,800,000 x 0.007345/12 = R1,101.75 a month
Their new rates bill in July will look like this:
R3,000,000 less R350,000 = R2,650,000
R2,650,000 x 0.07345/12 = R1,622.02 a month
Assume the objection is accepted, say in January 2019, their bill will be adjusted back to July 2018 and it will be:
R2,500,000 less R350,000 = R2,150,000
R2,150,000 x 0.007345/12 = R1,315.98 a month
Truluck said the property owner has two options:
1. They can continue paying the old rate of R1,101.75 a month. Come January, if the objection is accepted, they will have to repay R214.23 x 6 months = R1,285.38 plus interest. If the objection is disallowed, the owner will owe R520.27 x 6 months = R3,121.62 plus interest.
2. The owner can pay the estimated new rates based on the objection: R1,315.98.
The latest valuation took place in 2017 and will affect rates bills from July 1.
Valuations take place every four years but they can be delayed by up to one year. The previous general valuation roll was conducted in 2012 and released in 2013.
"Over 40,000 electronic objections were received by the 3pm deadline on April 6. The valuation team will start processing them soon and the first results will start to be released in tranches within a month or two. Then we will see if our objections have been successful and by how much," Truluck said.
He said owners who did not get objections in on time, and believed their properties were overvalued, would "have to go through a long and involved process called a section 78 query".
"You will need apply to the city and wait until all the other objections are processed. Once that is done, your property will be placed in a supplementary valuation roll next year. If you are unhappy with the new value, you will need to object within one month.
"If successful and it is lower, then it will be backdated from July 1 2018 and you will receive a refund. If it is higher, then it will be dated from the date it was approved and you will have to pay back the arrears," he said.