The Receiver of Revenue was placing an unreasonable burden on the man-in-the-street and the property industry with expectations of valuations done in terms of the Capital Gains tax, says a Cape Town property expert.



"The Receiver is depending a lot on the largesse of the property industry," says Ian Slot, MD of the Seeff Atlantic Seaboard licence. "Agents are not paid for their time, only when they make a sale. And there are not enough qualified valuers to handle the workload, so the public will turn to property agents. The Estate Agency Affairs Board, the government body overseeing the industry, has made it clear that should the South African Revenue Service challenge a valuation and the challenge be upheld, the estate agent may be personally responsible for any penalties imposed. "Seeff is happy to value properties in terms of CGT - but many companies will begin to find it a huge burden on their time. And agents will obviously be under pressure to please the SARS." According to newspaper reports, some property companies are already advertising their services - at a fee - to do valuations. The following questions were put to the Estate Agency Affairs Board in an attempt to gain clarity. # Who may conduct a valuation? # Estate agents do valuations free of charge where there is a reasonable chance that they will get a mandate - should they now charge for valuations where the client has only Capital Gains Tax in mind? # Will the Board or any other body set a fee - a recommended fee? # Will the Board lay down guidelines for these valuations (as described in the ST column) for estate agents? # Does legislation give sufficient clarity on the matter of valuation of property? Bridget Morony of the Board's legal department replied: "An estate agent may well conduct a CGT valuation but, in doing so, accepts full responsibility for the correctness thereof. Should SARS challenge that valuation and the challenge be upheld the estate agent may be personally responsible for any penalties imposed. "Estate agents who are not sworn valuers are in fact precluded from levying a charge or administration fee for the valuation. Charging therefore may well constitute conduct deserving of sanction. Registered valuers, however, do operate under a fee recommended by the Council of Valuers. "It is unlikely that the Board will lay down any guidelines since the question of valuations falls within the ambit of the valuers profession. We believe that legislation does sufficiently clarify the position of valuations especially if it be borne in mind that a person disregards the first R1 million of the capital gain or loss on the disposal of a primary residence." Morony concluded that the Board did not feel that estate agents were entitled to a fee for the valuation of property as this would bring them in direct conflict with the valuer's profession. By 2003, all properties must have been assessed as to their value as at October 1 this year. "The Receiver has left it to the taxpayer to furnish a proper valuation of their property, and who better to do it than an established agent in your area who can assess it through comparable market figures? "We in the property industry want to act responsibly and get it right from the start. Nobody wants to be in a situation where vital information in terms of valuation, or indeed the qualification of the agent, is found wanting," says Ian Slot. "The situation presents an enormous challenge to the industry." Graham Norris - Independent Newspapers 15 October 2001