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Tuesday Oct 06, 2020

Stellenbosch golf club wins in valuation saga

The De Zalze Golf Club, which only pays rent of R100 per annum, emerged victorious after a decision on its R26.5 million valuation was set aside.

This week, the Western Cape High Court set aside a decision by the Valuation Appeal Board for the Stellenbosch Municipality which valued the golf course at R26.5m.

The valuation was for the purposes of determining municipal rates payable by the club.

The court has thrown the valuation back at the board to look into it again.

The club also appealed in court papers against the municipality's original valuation of R97.5m.

The club holds a 99-year lease of the golf course from the De Zalze Winelands Estate Home Owners Association. The golf course is operated by De Zalze Golf Club, a non-profit company and the sole member.

The agreement between the parties stipulated that income derived would only be used for the golf course and business. The leased area comprises 14 erven of about 63.17 hectares.

The valuation of R97.5m stated that it was in respect of a portion of the land which included fairways, greens, clubhouse offices and workshops.

In 2014, the municipality valued the golf course at R10m and the club objected. Following negotiation, the club accepted a valuation in 2016 of R9.705m, though it recorded its view that its leasehold did not have a market value and it reserved the right to base a future objection on that view.

In March 2018, the municipality issued a supplementary valuation of R97.5m which the club rejected. In its objection, the club argued that the leasehold should receive a purely nominal valuation. It also said the presence of the golf course had caused a substantial enhancement in the value of the residential properties in the estate and to assign material value to the golf course would result in double taxation. The club also questioned the different methods used for the valuation.

Judge Owen Rogers noted that it was “apparent from the record” that the valuation of golf courses had presented challenges for municipalities around the country.

He added the court was not entitled to set aside an administrative decision just because on the merits it would have reached a different conclusion.

The municipality which opposed the application, was ordered to pay the club's legal counsel costs.

Cape Argus


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