Michael Jacques

Johannesburg adopted site value rating in 1918. Decades later it became the shining star in the arcane world of city finances, with its city valuer, John McCullough, a star on the world-wide municipal conference stage. Under his influence, and with the commercial success of Johannesburg as an example, many cities in the US and Australasia changed their rating systems, if not to pure site value rating at least to composite rating with a bigger emphasis on the site value. But Mason Gaffney, a professor of economics at the University of California, visited SA in 1992 for a conference on land value taxation at the University of Pretoria. He was astonished that Johannesburg existed at all, let alone become a commercial success. In a paper written after he returned to the US, he analysed every possible reason for this success and concluded that it was due mainly to site value rating. 1984 62 of the 112 largest towns were on site value. One of the main purposes of the bill is to standardise the method of rating in all municipal jurisdictions. The chosen method is the one that is the least used: flat rating on the market value of a property at the date of the valuation. Firstly, flat rating is not the easiest and least expensive method to administer and, historically, municipalities have always undervalued properties to avoid a mass of objections to the valuation roll. Johannesburg Oct 29 2003 SAPOA Online

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