Start Date
26-6-2024 3:15 PM
End Date
26-6-2024 4:15 PM
Description
The Local Government: Municipal Property Rates Act, 6 of 2004, (hereafter “MPRA”) regulates the levying of recurrent property taxation in South Africa. The basis for the determination of value is market value on the date of valuation. The date of valuation must be within 12 months of the effective date of the valuation roll. The legislation requires municipal valuers to conduct the assessments in accordance with generally recognised valuation practices, methods, and standards. The advancement of computational software and the permission to use mass appraisal techniques enables the application of mass appraisal methodologies by the valuation and computer-assisted mass appraisal community. Such techniques are used extensively for the preparation of values for recurrent property taxation with varying degrees of success. Despite the endorsement of the MPRA Standards by the South African Council for Property Valuers Profession no benchmarking is conducted on valuation models nor valuation rolls used for recurrent property taxation. The South African MPRA Standards are modelled on the IAAO Standards. (EXPAND) This paper aims to provide a comparative analysis of the performance of valuation models within small, predominately rural, and high capacity, urban municipalities. The application of the recommended model diagnostics and valuation performance measures outlined in the MPRA Standards are addressed and appraised for their relevance and appropriateness. These include both measures of value and value uniformity. The key challenges within smaller rural municipalities are the lack of valid and relevant sales information especially in areas owned by traditional authorities. The study addresses to potential alternatives to registered sales. Revaluation Impact Analysis or comparing proposed new roll values to old valuation roll values has limitations. Previous roll values are questioned in terms of quality and integrity and are infrequently supported by comprehensive market reports or sales evidence. Data standards and data interoperability are key issues. Various indicators and observations are researched from both documented, and conclusions made about the appropriateness and application of different valuation models within different sized municipalities in South Africa.
Recommended Citation
Channing, Janet and Erasmus, Matthew, "The application of mass appraisal standards on valuation models in South Africa" (2024). Mass Appraisal Valuation Symposium. 11.
https://researchexchange.iaao.org/mavs/mavs2024/sessions/11
The application of mass appraisal standards on valuation models in South Africa
The Local Government: Municipal Property Rates Act, 6 of 2004, (hereafter “MPRA”) regulates the levying of recurrent property taxation in South Africa. The basis for the determination of value is market value on the date of valuation. The date of valuation must be within 12 months of the effective date of the valuation roll. The legislation requires municipal valuers to conduct the assessments in accordance with generally recognised valuation practices, methods, and standards. The advancement of computational software and the permission to use mass appraisal techniques enables the application of mass appraisal methodologies by the valuation and computer-assisted mass appraisal community. Such techniques are used extensively for the preparation of values for recurrent property taxation with varying degrees of success. Despite the endorsement of the MPRA Standards by the South African Council for Property Valuers Profession no benchmarking is conducted on valuation models nor valuation rolls used for recurrent property taxation. The South African MPRA Standards are modelled on the IAAO Standards. (EXPAND) This paper aims to provide a comparative analysis of the performance of valuation models within small, predominately rural, and high capacity, urban municipalities. The application of the recommended model diagnostics and valuation performance measures outlined in the MPRA Standards are addressed and appraised for their relevance and appropriateness. These include both measures of value and value uniformity. The key challenges within smaller rural municipalities are the lack of valid and relevant sales information especially in areas owned by traditional authorities. The study addresses to potential alternatives to registered sales. Revaluation Impact Analysis or comparing proposed new roll values to old valuation roll values has limitations. Previous roll values are questioned in terms of quality and integrity and are infrequently supported by comprehensive market reports or sales evidence. Data standards and data interoperability are key issues. Various indicators and observations are researched from both documented, and conclusions made about the appropriateness and application of different valuation models within different sized municipalities in South Africa.
