How the rates act will affect you

OVER the next few weeks, the Herald will take an in-depth look at the Municipal Rates Act and answer the most fre­quently asked questions.
Why is there a need for the Municipal Rates Act?
• To regulate the pow­er of a municipality to impose rates on proper­ty. (In accordance with section 229(2) of the Constitution);
• To provide a uni­form framework for reg­ulating the rating of prop­erty throughout the coun­try;
• To exclude certain properties from rating in the national interest;
• To make provision for municipalities to im­plement a transparent and fair system of ex­emptions, reductions and rebates through rating policies that are a prod­uct of collective partici­pation of communities;
• To make provision for fair and equitable valuation of properties;
• To make provision for fair objections and appeal process regarding valuation of property;
• To assist in build­ing economically and financially viable mu­nicipalities that are en­abled to meet the ser­vice delivery priorities of their communities.
What are municipal property rates?
Municipal property rates are a cent amount in the rand, levied on the market value of im­movable property (land and buildings).
Municipalities have a long history of rating property in terms of the old Provincial Ordinanc­es (of the former Cape, Natal, Orange Free State and Transvaal provinc­es), especially in the for­mally white urban areas.
In addition, the Con­stitution of the Republic of South Africa gives municipalities the power to value and rate property in their areas of jurisdiction.
The Municipal Property Rates Act replaces the old system of property valuation and rating, based on the old Provincial Ordinances. It does not give municipalities the original power to rate property; it merely seeks to regulate an original power vested in municipalities by the Constitution.
Who is liable for payment of municipality property rates?
All immovable property owners are liable for the payment of rates.
Therefore all property owners, including commercial, residential, agriculture, and government are included in the definition of property.
Land tenure rights such as permission to occupy (PTOs) commonly found in communal areas, are also included the definition of property.
Municipalities must ensure that unit owners in sectional title schemes are registered with them because they will no longer be able to rate the body corporate.
Next week we will discuss how the municipal property rates and the market value of a property are determined.

South coast Herald 18 Jan 2008