Property values soar - but what will homeowners pay?

GEORGE NEWS - A sharp increase in some municipal property valuations has left George homeowners fearing a bigger dent in their pockets.

With reported increases of up to 90%, residents are questioning not only the value placed on their properties, but also how much more they could end up paying in rates.

George Municipality opened its general valuation roll for public inspection on 5 November. The notices, which the municipality started issuing a day after the local government elections, sparked concern on social media, where residents shared increases of 20%, 60% and higher.

The valuations reflect changes in property values since the previous update in 2022 and will be applicable from July 2027 to June 2030.

Jacques Wessels, chairperson of the George Ratepayers’ and Residents’ Association (GRRA), said the association has been unable to get answers from George Municipality about how valuations are calculated. “It appears to be the same set-up as with the previous valuation process. To us, it seems very unstructured, but we are unable to get any clarity on the matter.”

However, Wessels said his biggest concern is whether the municipality’s operating expenses are exceeding its income. “Property rates are used to cover any shortfalls on the operating account, so we want to know whether the deficit is increasing annually.”

The GRRA is investigating whether any operating shortfall has grown over the years.

Wessels said national government funds services to qualifying indigent households, while developers must contribute towards infrastructure for new developments.

“If the shortfalls on the operating account are increasing annually, the municipality needs to bring its expenditure under control to provide relief to ratepayers. You do not want a situation where people eventually can no longer afford to live here.”

In a statement issued yesterday (Wednesday 11 November), the GRRA stressed that expanding the overall property value pool through fair market revaluations should allow the municipality to significantly lower the rate in the rand and increase exemptions.

“This was not apparent in the previous valuation methodology in 2022/23, leading to membership frustration due to inconsistency in the values attached to similar properties.”

Questions about market values

Dr Dennis Farrell of the Business Café shares Wessels’ concerns about the valuation method.

He said he previously questioned the municipality after discovering that a house, bought for R3m, was valued at that amount, while an identical neighbouring property, bought years earlier, was valued at R2m.

“This makes no sense, and the municipality has never been able to provide me with an explanation. If the municipality says it values properties according to market value, it needs to explain which market value it is referring to.”

Farrell is concerned that excessive valuations could be used to cover operating shortfalls. He also questioned whether the municipality would increase the current residential rates exemption of R230 000, and adjust the rate-in-the-rand downward to accommodate the new valuations.

What higher valuations mean for rates

Under the current 2026/27 tariff structure, residential owners pay R0.00678 per rand of taxable property value, with the first R230 000 excluded.

At this tariff, a property valued at R1m pays rates of approximately R435 monthly. If its valuation rises to R1.6m, rates would increase to approximately R774 - about 78% more. However, these figures exclude possible additional rebates and are based on the current tariff.

Valuation methods used

In a public notice this week, George Municipality said it appointed DDP Valuers (Pty) Ltd to undertake the general valuation process, using aerial photographs, available property information, physical site visits where required, neighbourhood inspections and an analysis of property market information and comparable sales.

"These methods were used to assess properties and ensure that valuations reasonably reflect market values as at 1 July 2026."

The municipality said the new property valuation alone does not determine the final monthly rates payable.
The 2027/28 rate in the rand (tariff), still to be determined, together with the new valuation, will determine the actual amount to be charged from July 2027. The new tariff will be adjusted to balance the overall impact on property owners.

Valuer Nina Peycke. Photo: Supplied

'Valuations not excessive'

An independent valuer in George, Nina Peycke of Garden Route Valuers, said the valuations are well in line with market values, although there are discrepancies where some properties that are similar to others in a given neighbourhood are undervalued.

"I have also noticed that properties in upmarket areas such as Glen Barrie and Heatherlands are in some instances valued lower than similar properties in areas such as Denneoord and Dormehls Drift, and even George South."

She said a reason for this could be that, since the Covid pandemic, with continued semigration affecting the general Garden Route area, properties in middle-class areas such as Denneoord have gone up in market value because of a higher demand from out-of-town buyers who cannot afford the properties in the upmarket areas.

"But in general, market values have risen significantly over the past four years. In none of the complaints I have heard of so far were the properties valued above the range.

"Industrial and commercial properties were undervalued in the previous valuation period, in my opinion, and there has been a correction in this sector in the current valuation period, so some business owners got a nasty shock."