Valuation Scandal

Maverick activist exposes ludicrously low property rates for the super-rich.

- Jonathan Erasmus

A PROPERTY RATES CRUSADER HAS had his mission for tax justice cut short – by the Oppenheimers. Dr Robert McLaren had been running a remarkable one-man campaign to ensure that property owners, particularly the very wealthy, shoulder their fair share of the municipal tax burden.

Dr McLaren had exposed major deficiencies in the valuation system applied in Durban and various towns in KZN, and most recently extended his campaign to Johannesburg, where the same company which operates in KZN is contracted to do the city’s property valuations. He found that their system tends to overvalue low-end properties,while massively undervaluing the properties of the very rich, in many cases not valuing them at all.

Most recently Dr McLaren took it upon himself to lodge formal objections to the valuations of 961 properties in the upper-class suburbs of Johannesburg, as found on the general valuation roll of 2013, which came into force on 1 July 2013 and runs to 2017, when the next general valuation will take place.

In the first objection phase McLaren had a success rate of 65%, and the mammoth exercise as a whole has the potential to add R65 million per annum to the city’s rates income (excluding yearly increases), and add more than R4,6 billion to the city’s property values.

Most of these (all those entailing an increase of more than 10% in the initially assessed value) are, however, subject to a review – where the next major flaw in the system emerges. The review system is so cumbersome and the number of objections lodged so vast that, at the current rate, reviewing the objections to just the 2012 valuations will take decades, reducing the process to near absurdity (See “Two Very Different Accounts” on pg 21.)

McLaren subsequently appealed 363 findings made during the objection phase, still believing the city valuators had erred.