Professional valuers cheap at the price

Posted On Thursday, 25 September 2003 02:00 Published by
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The requirements for accountability and corporate governance of property companies, and the implementation of capital gains tax, have highlighted the role of property valuers in SA, particularly the commercial area.
The requirements for accountability and corporate governance of property companies, and the implementation of capital gains tax, have highlighted the role of property valuers in SA, particularly the commercial area.

Although there is not a shortage of residential property valuers in SA, there is a need for more in the commercial property sector.

Commentators warn that residential property owners who are considering doing their own property valuations should know what they are doing.

When and if they sell their properties, their valuations will be scrutinised closely by the South African Revenue Service (SARS).

They may well end up paying thousands of rand they cannot afford to the receiver because they have not paid a few thousand rand for a valuation from an independent professional.

SARS announced this week that the deadline for asset valuation for capital gains tax had been extended by one year to September 30 next year.

The extension, granted by Finance Minister Trevor Manuel, is in response to requests from taxpayers, practitioners and valuers.

The effective date of capital gains tax remains October 1 and affects all assets not just residential properties that have been acquired before that date.

Mike Bush, head of the valuations division of Motseng Marriott, says that with improved transparency and corporate governance of many listed property funds, there is pressure to get external property valuations.

"There is definitely a shortage of property valuers on the commercial side," says Bush.

It is a very specialised field and it takes several years of training and experience to become a valuer, he says.

"At the end of the day we have to be accountable for our valuations," Bush says.

SA has a shortage of black professional valuers.

Motseng Marriott's valuations division have taken on two candidate valuers from previously disadvantaged backgrounds to train them in the field and a third candidate is being employed next month.

Bush says it is difficult to predict exactly what the average cost of a valuation could be, because the cost depends on the size of the property and its value.

He says valuations signed off by registered professional valuers are more likely to be taken seriously than ones done by property owners.

Erwin Rode, of Rode & Associates, which conducts property valuations, says a professional valuer has to be registered with the South African Council for the Property Valuers Profession.

In SA a valuer requires a minimum of four years' study and practical experience.

Technikon SA offers one of the most popular valuation courses and the University of Cape Town (UCT) offers a degree course.

Kathy Evans, a senior lecturer in property finance at UCT, says the university offers an undergraduate property degree, a BSc in property studies.

Evans says the three-year degree course is accredited by the South African Council for the Property Valuers Profession, while the honours degree is accredited by the Royal Institute of Chartered Surveyors.

Francois Viruly, of valuers and property researchers Viruly Consulting, says people discover that if they want their valuations to be taken seriously, that they should use a professional valuer with the necessary expertise.

He agrees that there is a shortage of qualified valuers in the commercial sector.

Viruly also points out that the proposed property rates bill, which will require that improvements on property are valued, will also create a demand for professional valuations.

As part of local government reform, the 2003 Property Rates Bill attempts to introduce a simpler, more uniform rating system.

Rates would be levied on a property's improved market value.

This is the amount the property would realise if it was sold in the open market by a willing seller to a willing buyer.

Viruly says there are also international valuation standards and that increasingly SA will find itself following these standards.

Business Day

Publisher: Business Day
Source: Business Day

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