General valuation fairer this time round, says RPA
The new general valuation roll – GV2012 – appears to be more accurate and fairer than in previous years, particularly with regard to the values ascribed to commercial properties within their portfolio, says Leigh Metcalf, a director of Rabie Property Administrators (RPA).
Metcalf said in the previous two general valuation rolls they had found errors in most of the valuations of buildings in their portfolio, which currently stands at just under R4billion, and had had to lodge objections for about 70% of the properties.
“This time round we have had much more interaction with valuers who have in many instances requested information from us to assist them in their valuation which has eliminated many errors. As a result the number of objections we have needed to lodge is down at around 30% of the portfolio.”
She said it was evident when valuers had not visited the properties or followed the correct procedures as that was when errors tended to creep in. “We have one sectional title commercial building in our portfolio which has four different sections which are in fact common areas – walkways – and which were each valued at R1,4million. That mistake would have been picked up if the valuer in question had visited the site.”
She pointed out that the market value of freehold and sectional title residential properties was based on comparable sales, whereas commercial and industrial properties are valued on the capitalised income (market related income) produced by the property, in conjunction with comparable sales.
“If an incorrect market valuation in ascribed to a property it can seriously affect the value of that property. In the case of residential property, if the municipal valuation is lower than it should be, it can have an adverse effect when you try and sell the property as potential purchasers might think it is over-priced. Whereas with commercial properties, the higher the rates are the lower the value of the property as higher rates push up operating costs and that negatively effects net income and consequently the value of the property.”
Metcalf warned that the GV2012 inspection and objection period closes on Tuesday 30 April so time was rapidly running out to lodge objections.