Since August last year, when the effect of the Drakenstein Municipality’s rates hike became apparent, the Paarl Ratepayers Association has been battling to convince the cash-strapped municipality it had committed a grave error. Last week the council saw the light and decided that there would be no increase in property rates this coming July (according to the draft budget approved on 30 March).
Due to the new valuations that had come into effect on 1 July last year, residential property owners, especially those in gated villages, were shocked to see their rates had increased from 12% to as much as 27%, and many feared they would have to sell their properties. More than 300 residents of Boschenmeer, Val de Vie, Pearl Valley and L’Ideal signed a petition against the rates increases.
Last year, both Breede Valley Municipality and Stellenbosch Municipality decreased their property rate factor by 20,8% and 20,73% respectively, following recently implemented General Valuations.
Drakenstein, however, was only able to decrease the rate factor by 2% and it is likely that the main reason for this was an inadequate valuation roll which could not “support” the rates requirements.
According to professional valuer Erik Marais, the high residential rates increase was mainly due to the undervaluation of rural properties as well as grossly inaccurate individual valuations. According to Marais it appears that the Municipal Valuer had not made effective use of supporting documentation from the municipality and the Deeds Office. It also seems that he was influenced by his personal opinion on the possible effect that the alcohol sales ban during the pandemic could have on the value of rural properties like wine farms.
“Property values should never be linked to industry trends and personal forecasts,” Marais pointed out, “but should be influenced purely by trends in property sales, which have continued to increase steadily despite the pandemic.”
In his independent report to the Paarl Ratepayers’ Association he said: “It is quite clear that both the Municipal Valuer and the municipality failed in their responsibilities to ensure an equitable and fair valuation roll as laid down in terms of the Act.”
In December the Paarl Ratepayers’ Association, together with the Wellington Ratepayers’ Association, submitted Marais’ report to the Minister of Local Government, Anton Bredell, and appealed to him to investigate the valuations and the untenable residential rates increase. Marais also provided the municipality with a list of grossly inaccurate valuations that indicate a loss of rates income of more than R500 000 per month. The matter is currently under investigation by the Municipality.
Dr Cas van Wyk, chairperson of the Paarl Ratepayers’ Association, welcomed the proposed residential property rate of 0%. He said: “It is unacceptable that owners of urban residential properties should be subsidising agricultural property owners, since bona fide farmers already receive a rebate of 75% on property rates. We will lobby against residential rates increases for the next three years, to make up for last year’s exorbitant increase.”
