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21 October 2021: Determining the true property value of heritage sites

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Oct 28, 2021

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SAIV unpacks what it means to buy a piece of local history

South Africa’s rich and diverse heritage is commemorated annually during the month of September. However, throughout the year, this diverse heritage is seen in the many properties in the country which have been declared heritage sites. These buildings may be coveted by some property owners thanks to their larger living areas, prime locations and historical significance – but their property value is often difficult to determine. “Additionally, once owned, property owners must consider a long list of restrictions which come with their new piece of history,” explains Natalie Ginsberg, Vice President of the South African Institute of Valuers (SAIV).

Ginsberg is a professional valuer who has seen many heritage buildings in her career. “I am based in Cape Town where there are many of these buildings! It is always important to check the heritage status of a property, as it can have an impact on the property value,” she explains. However, she adds that heritage status does not necessarily have a positive influence on value. It is very much property dependent and is subjective.

“Some purchasers are attracted to heritage features and specifically wish to own a heritage property. With the prestige of owning a heritage property comes costly maintenance and restrictions in terms of renovation and development. This can be a big deterrent for any purchaser, and in particular for developers,” explains Ginsberg. She adds that not only is the cost an important factor, but also the lengthy approval processes added to the standard approval process to follow for a property that does not hold heritage status. “As you can imagine, maintenance of a heritage site could be costly and sourcing replacement fittings and fixtures could be difficult. Renovation of a heritage site requires a formal application for consideration in order to permit the owner to make any changes or renovations.”

A heritage site refers to a place declared to be a national heritage site by South African Heritage Resources Agency (SAHRA), or a place declared to be a provincial heritage site by a provincial heritage resources authority. According to Section 34 (1) of the National Heritage Resources Act, “No person may alter or demolish any structure or part of a structure which is older than 60 years without a permit issued by the relevant provincial heritage resources authority.” Thus, any structure older than 60 years of age is protected by the Act.

Heritage sites are managed and graded by the provincial heritage resources authority and SAHRA in terms of categories and sub-categories to determine the historical significance. Per the Act, the categories include:

  1. Grade I: Heritage resources with qualities so exceptional that they are of special national significance.
  2. Grade II: Heritage resources which, although forming part of the national estate, can be considered to have special qualities which make them significant within the context of a province or a region.
  3. Grade III: Other heritage resources worthy of conservation.

Ginsberg explains: “The various local authorities encourage property owners to register their heritage sites with them, to help keep a database of all heritage properties. However, historical significance must be proven which will assist in the grading of the property.” It must be shown that:

  • The building is important in the community or played a role in that community’s history.
  • It has a strong or special association with the life or work of a person, group or organisation of importance in history.
  • There is significance relating to the history of slavery.
  • It’s important in exhibiting particular aesthetic characteristics valued by a community or cultural group.
  • It has the potential to yield information that will contribute to an understanding of natural or cultural heritage.
  • It’s important in demonstrating a high degree of creative or technical achievement at a particular period.
  • It has a strong or special association with a particular community or cultural group for social, cultural or spiritual reasons.
  • It possesses uncommon, rare or endangered aspects of natural or cultural heritage.
  • It’s important in demonstrating the principal characteristics of a particular class of natural or cultural places or objects.

“Heritage status has an impact on the value of a property and must be considered in the valuations process. It is important that property valuers are trained and appropriately skilled to be aware of heritage elements,” concludes Ginsberg.

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