PROPOSED AMENDMENT OF SECTION
46 AS PROVIDED FOR IN SECTION 33
(B) OF THE BILL.
The deletion of the words “the value of” may have the effect that a
structure in the nature of the Koeberg Nuclear Power
Station is reduced to Rnil. This inference is made with
reference to the Blue Circle Ltd v Valuation Appeal Board, Lichtenburg
and Another 1991(2) SA 772(A) judgement.
In the context of market value as the legislation now stands, the value of (emphasis on the word value)
machinery or equipment will merely be discarded. In other words it is merely an
arithmetic calculation to exclude the value of machinery and equipment However,
in terms of the proposed change the actual equipment and machinery must be
discarded, which, if one looks at the Blue Circle Judgement could have the
effect that the notional empty shell may be useless for any alternative
purpose. In the
“The greater the quantity of machinery and the more integral a part of
the buildings and structures it is, the more effect will it have in reducing
the improved value of the land. In a given case, it may be that an ‘empty
shell’ (having a nil value) remains after the intellectual exercise (of
assuming the absence of the machinery) has been performed.”
Therefore, in the case of a highly specialised building or structure,
which has been constructed solely to contain machinery of a specific nature and
which cannot be used for anything other than the containing and housing of
those specific machines, the intellectual exercise of assuming the absence of
the machinery will have the effect of reducing that which remains to a useless
empty shell having a nil value
It is not understood how this amendment will “ensure uniform application
of this provision”
Senior Counsel’s opinions can be made available in support of the above
concern which goes hand in glove with the additional issue raised under the
heading Market Value, below.
The proposed amendment is
therefore not supported.
The following proposals are
not part of the amendments proposed in the bill but the City urges the
portfolio Committee to give urgent attention to these matters as the
legislation as it currently stands is problematic
REVIEW OF MUNICIPAL
VALUERS DECISION.
The City of
Each objection will be considered by the municipal valuer
and a decision made on the question of value. Written reasons will be provided
for each decision.
It is quite obvious in processing the objections received that the
majority will require an adjustment upwards or downwards in excess of 10%.
Generally speaking, objections are not raised if the requested revised figure
lies within 10% of the value on the roll. The implication is that the appeal
board will, in the case of
MARKET VALUE
From a valuation perspective the fundamental requirement of the Act is
to determine the market value of property.
Market value infers that the property will or can be traded in the
market, i.e., what a willing seller will pay a willing buyer. However many
types of property do not as a matter of course trade and there is consequently
no market evidence to substantiate an assessment. See Jonker:
Property Valuation in
Both the Expropriation Act and the now repealed Property Valuation
Ordinance of the Western Cape have provided an alternative method to deal with
properties which are of “such a nature that there is no market therefore”:-
On the basis of the amount it
would cost to replace the improvements on the property, having regard to the
depreciation thereof for any reason, as determined on the date of valuation.
Section 45(3)(a) of the Act attempts to provide
a remedy but does not overcome the obstacle that market value must still be
assessed. Besides, it appears to deal only with property that can be dealt with
in terms a mass appraisal technique or system.
DEFINITION OF PROPERTY
The definition of property is too narrow and does not take account of
customary ways in which property is dealt with. . Approximately 75 000 improved
properties exist in the Cape Town Municipal area which are either owned in
terms of lease agreements or deferred transfer. In other words, they are not
registered entities but are physically occupied and in terms of the definition
of property cannot be valued separately which is absurd.
Furthermore, values of properties cannot always be reflected separately
on the roll. For instance where buildings straddle boundaries two or more
properties may form one economic entity.
The following amendments are proposed – add to definition of property:
Provided that::-
If the Surveyor General has approved a general plan or diagram of
subdivision in respect of any property, and any land unit forming part of the
subdivision has been improved such land unit may be valued separately,
If, in the opinion of the municipal valuer two
or more adjacent properties form one economic entity they may be valued as one
property..