In a significant ruling by the High Court of South Africa (Gauteng Division), the City of Johannesburg sought to overturn a Valuation Appeal Board decision regarding the categorisation of 24 residential units located in Melrose Square on Oaks. On 9 December 2021, the Appeal Board determined that these units should be categorised as “sectional title residential” with effect from 1 July 2013. This differed from the City’s prior categorisation of the units as “sectional title business”.
The dispute arose after a supplementary valuation roll reclassified these properties from residential to business — despite their prior listing as residential in the 2013 General Valuation Roll. Unit owners filed objections, arguing that the properties should remain residential due to their exclusive residential use, compliance with zoning, and approved building plans. The difference in property tax rates is substantial: business rates are roughly three times higher, making the categorisation financially significant.
The Valuation Appeal Board reviewed evidence from both the Municipal Valuer and the unit owners. It concluded that the City’s justification for the business categorisation was unjustifiable and “palpably wrong”, noting that the categorisation did not align with the actual use of the properties.
This ruling highlights the complexities of valuation and categorisation in Johannesburg and may set a precedent for similar cases in future.
The judgment is now being challenged. We understand that the City has applied for leave to appeal to the Supreme Court of Appeal in Bloemfontein.