The Minister forProvincialand Local Government intendsintroducingthe Local Government: Property Rates Bill, 2003 in the National Assembly during the first quarter of 2003. The draft Bill is hereby published in accordance with Rule241(1)(c) of the Rules of the National Assembly.
Interested persons and institutions may submit written representations on the draft Bill to the Secretary to Parliament by no later than 15-04-2003.
(As introduced in the National Assembly as a section 75-Bill; explanatorysummary of Bill published in Government Gazette No.
To regulate the powerof a municipality to impose rateson property; to amend the Local Government: Municipal Systems Act,2000, so as to make further provision for the servingof documents by municipalities; to repeal certain legislation; and to provide for matters connection therewith.
Part 2 32.
Amendment of section 115of Act 32Of2000 78.
a structure constructed solely for the purpose of constructing such a building or immovable structure; and any building or other immovable structure under the surface of the property which is the subject matter of any mining authorisationor mining right as defined in the Minerals Act, 1991 (ActNo.
the Restitution of LandRightsAct,1994(Act No. 22of1994);or holds the property subjectto the Communal Property Associations Act, 1996 (Act No.
as a corporate entity, means a municipalityas described in section 2of the Municipal Systems Act; and as a geographical area, means a municipal area demarcated in terms of the Local Government: Municipal Demarcation Act,1998(AGf No.
"municipal manager"means a person appointed in terms of section82 of the Municipal Structures Act; "Municipal Structures Act"means the Local Government: Municipal Structures Act, 1998 (Act No. 117 of 1998); "Municipal Systems Act"means the Local Government: Municipal SystemsAct, 2000 (ActNo.
a person in whose nametheproperty is registered;.
(i)theDeedsRegistriesAct,1937(Act No. 47of1937);or the Mining Titles Registration Act, 1967(Act No.
(ii)alandtenureright, and "registered" and "unregistered" have corresponding meanings; "Sectional Titles Act" means the Sectional Titles Act, 1986 (ActNo.
over which land tenure rights were registered or granted; or which is earmarked for disposal in terms of the Restitutionof Land Rights Act, . 1994(Act No. 22 of1994); "this Act" includes regulations made in terms of section 71.
A district municipality may not levy a rate on property except on property in a district management area within the municipality.
the rates policy it must adopt in terms of section 3.
Adoption of rates policy on the levying of rates on rateable property in a municipality.
0 allow a municipality to promote local, social and economic development; and identify, on the basis of a cost benefit analysis, all rateable properties that may not be subjected to valuation for purposes of rating.
and provided forin a rates policy adopted by a municipality, must comply with any national framework that may be prescribed.
4 of the Municipal SystemsAct; and comply with subsection(2).
A municipal council must take all comments and submissions madeto it or received byit into account when it considers the draft rates policy.
Sections 3 and 4, read with the necessary modifications as the context may require, apply to any adjustment of a rates policy.
A municipalitymustadoptby-laws to give effect to the implementation and enforcementof its rates policy.
different categories of owners liable for the paymentof rates.
for which tenure is legally insecure as a result of past racially discriminatory laws or practices and for which it is therefore impossible or unreasonably difficult to establish a value.
prevent a municipality from granting in terms of section 14 exemptions from, or rebates or reductions on, rates leviedin terms of subsection (1).
Subjecttosection 16, amunicipalitymay in terms of the criteria set out in its rates policy levy different rates for different categories of rateable property.
(i)acquiredthroughtheProvision of Land andAssistance Act, 1993 (Act No.126 of 1993), or the Restitution of Land Rights Act, 1994 (Act No. 22 of 1994); or which issubject to the Communal Property Associations Act, 1996 (Act No.
A rate on property which is subject to a sectional title scheme, must be levied on the individual sectional title units in the scheme as and not on the property a whole.
Amount of rate a rate based on the improved value of the property shownon the current valuation roll of a municipality; or a flat rate for property within is a specified valuation band, provided that band below a prescribed valuation limit.
The amount of a flat rate in terms of subsection (1) (6) may not exceed the amount that would otherwise have been payable on properties in the lower endof the valuation band had the rate been levied in terms of subsection (1>(a).
Rates to be levied by resolution municipal council with a supporting vote of a majority of its members.
that a resolution levying a rate on property has been passed by the council; and that a copy of theresolution is available for public inspection during office hours at the main administrative office of the municipality concerned and at any other places specified in the notice.
a list of all exemptions, rebates and reductions granted in terms of subsection during the previous financial year; and a statement reflecting the income foregone for the municipality by way of such exemptions, rebates and reductions.
thenationalmobility of goods, services, capital or labour.
coastal public property regulating the protection of the coastal environment; the territorial waters of the Republic as determined in the Maritime Zones Act, 1994 (ActNo. 15 of 1994), and islandsof which the state.'
Edwyd Islands Act, 1948 (Act No.
at least the first R15 000 of value of all residential property, unless that the Minister may, in consultation with the Minister of Finance, from time to time, increase this monetary limit to reflect inflation; and property or a category of properties identified in terms of subsection (3),or rates above the specified limit on such property or category of properties.
give notice to the relevant municipality or municipalities that a rate, or a rate above the specified limit, on that property or category of properties is disallowed in terms of subsection (2)(i).
A notice issued in terms ofsubsection (3) must give the reasons why a rate on that propertyor category of properties, or a rate above the specified limit on that property or category of properties, would materially and unreasonably prejudice a matter listed in paragraph(a)to (c) of subsection (1).
The ratio referred to in subsection (l)(b) may only be prescribed with the concurrenceof the Ministerof Finance.
Limits on annual increasesof rates by which a rate on property may be increased.
The Minister may on good cause exempt a municipality from a limit set in terms of subsection(1).
75 per cent of the rate for that year otherwise applicable to the property.
A rate levied on new rateable property or on propertyof which the owner is a land reform beneficiary may not be higher than the rate levied on similar property or categoryof property in the municipality.
The MEC for local governmenpinay extend the phasing in period referred to in subsection (1) to a period which together with the initial period does not exceed six financial years.
Whenextendingaphasing in period, the MEC for local government must determine the maximum percentage of the rate payable during each financial year in the extended period.
Special rating areas define an area within that municipality as a special rating area; and levy an additional rate on property in that area for the purpose of funding for improvements exclusivelyin that area.
must obtain the consent of the majority of the members of the local community in the proposed special rating area that may be required to contribute to the additional rate; and may establish a committee composed of persons representing the community in that area to act as a consultative and advisory forum for that municipality on the improvements to be effected in it, provided gender representivity is taken into account when such committeeis established.
Subsection (1) does not preclude a municipality from using its resources derived from sources other than an additional rate to fund improvements anywhere in that municipality, including a special rating area.
Part A of the register consists of the valuation roll.
a rebate on or a reduction in the rate in terms of section 14; and a phasing in of the rate in terms of section 18.
The register must be open for inspection by the public during office hours.
A municipality must review the \ register at least annually.
9 of the Municipal Systems Act.
Joint owners of property other than property in a sectional title scheme are jointly and severally liable for the amount due for rates.
A municipality may not recover the rate, or any part of it, from the body corporate controlling a sectional title scheme.
A body corporate controlling a sectional title scheme may not apportion and collect rates from the owners in the scheme.
of the sectional title units in a single amount annually or in periodic instalmentsof equal or varying amounts; or in special cases, as may be agreedwith the owner of the property.
Ifarate is payable in asingleamountannuallyitmustbe paid before a day determined by that municipality.
If it is payable in instalmentsit must be paid before a day in each period determined by that municipality.
v in the case of an additional rate referred to in section 19, the amount and the purpose of the rate.
A person who has not received a written account in terms of subsection (1) must enquire from the municipality's office the amount due for rates and, on receipt of such information, is liable for payment of such rates.
If anamountdueforrateslevied in respect of apropertyis unpaid after the day determined in terms of section 23(2),a municipality may recover the amountin whole or in part from a tenant of occupier of the property.
The amount a municipality may recover from the tenant or occupier of the property is limitedto the amount of the rent or other money due and payable by the tenant or occupierto the ownerof the property.
Any amount a municipality recovers from the tenant or occupier of the property may be set off by the tenantor occupier against any money owed by the tenant or occupier to the owner.
If anowner of aproperty is absent, amunicipalitymayrecover the amount duefor rates on the propertyin whole or in part from'the agent of the owner or other person receiving rent for the property on behalf of the owner.
A municipality may recover the amount due for rates from an agent of the owner or person receiving rent for the property on behalf of the owner, only after it has given written notice to that agent or person.
The amount a municipality may recover from the agent or other person is limited to the amountof that rent received by the agent or that person after written notice has been given by that municipality to that agent or person inofterms subsection (2), less the commission due to that agent or person, subject to the Estate Agents Act, 1976 (ActNo. 1 12of 1976).
The agent or other person must, on request by a municipality, furnish that municipality with a written statement specifying all payments for rent on the property received by that agent or person during a period determined by that municipality.
General valuation and preparation of valuation rolls a general valuation to be made of all rateable properties in a municipality subject to subsection (2); and a valuation roll of all those properties to be prepared.
Forthepurposes of a generalvaluation, amunicipalitymust fix a period that may not be more than nine months before the beginning of a financial year in which theroll is to be first implemented.
The general valuation must reflect the value of properties, determined in terms of this Act, as at the date of valuation.
42; and remains valid for that financial year or for one or more subsequent financial years as that municipality may decide, but intotal not for more than four financial years.
At the requestof a municipality, the MEC for local government may extend the period for which a valuation roll remains valid to five financial years.
A municipal manager may designate one or more officials of a municipality as assistant municipal valuers to assist a municipal valuer with the performance of any of the functions set out in subsection (1).
of of one of them as their municipal valuer.
A municipal must be a person registered as a valuer or an associated valuer in terms of the Property Valuers Profession Act,2000 (Act No. 47 of 2000); and may not be a councillor of that municipality.
or a valuer in training in terms of the Property Valuers Profession Act,2000; and may not be a councillor of that municipality.
by the municipal valuer may, between07:30am and0500pm, enter upon and inspect any property that must be valued for purposes of this Act.
A municipal valuer or assistant municipal valuer whois not an official of a municipality, must comply with the Code of Conduct asif that person is such an official.
A decision to dismissamunicipalvaluer or assistantmunicipal valuer in terms of subsection (3) must be based on a finding by an enquiry conducted in terms of the Labour Relations Act,1995 (Act No. 66 of 1995).
A municipal valuer or assistant municipal valuer who is not an official of a municipalitywho contravenes or fails to comply with subsection(1) is guilty of misconduct, andis subject to his or her contract of employment being rescinded.
Propertymustbevalued in accordancewithgenerally recognised valuation practices, methods and standards, and the provisions of this Act.
If the available market related data of any category of rateable property is not sufficient for the proper application of subsections (1) and (Z),such property may be valued in accordance with any mass valuation. system or technique approved by a municipality concerned and as may be appropriate in the circumstances, including a valuation system or technique based on predetermined bands of property value and the designation of those bands on of properties to one the basisof minimal market related data.
Subject to the provisions of this Act, the improvedvalue of property must be the amount the property would have realised ifsold on the dateof valuation in the open market by a seller to a buyer.
the value of the property must reflect any licence or privilege relating to the property;and the value of any improvement that was erected or is being used in contraventionof a conditionof title or any legislation, including a provision of a town planning or land use scheme, must be inc!uded as if the improvement was erected and is being used lawfully.
Valuation of property in sectional title schemes of each sectional title unit in the scheme in accordance with section39.
In this section, a word or expsssion to which a meaning has been assigned in the Sectional Titles Act, has the same meaning.
the postal address of the owner; and any other prescribed particulars.
inviting everypersonwhowishes to lodge arc objection in respect of any matter in, or omitted from, the rollto do so in the prescribed manner within the stated period; and serve on every owner of property listed in the valuation roll a copy of the notice referred to in paragraph(a)together with an extractof the valuation roll pertaining to that owner's property.
Inspection of, and objectionsto, valuation rolls inspect and make extracts from the roll during office hours; and lodge an objection with the municipal manager against any matter appearing on or omitted from the roll.
An objection in terms of subsection (1) (6)must be in relation to a specific individual property and not against the valuation roll as such.
A municipal manager must assist an objector to lodge an objection if that objector is unable to read or write.
A municipal council may also lodge an objection with the municipal manager concerned against any matter appearingoronomitted from the roll.
in terms of section 44.
The lodging of an objection does not defer liability for payment of rates beyond the date determined for payment.
decide objections on facts, including facts submitted by an objector, and, ifthe objector is not the owner, by the owner; and ' (c) adjustthevaluationroll in accordance with thedecisionstaken.
Anyadjustmentsmadetoavaluation roll in terms of section 44(c), takes effect on the effective date.
recover from, or repay to, the person liable for rates the difference determined in termsof paragraph (a).
a municipal valuer must give written reasons to a municipal manager; and that municipal manager must submitto the relevant valuation appeal board that municipal valuer's decision, the reasons for the decision and all relevant documentation for review.
any adjustments made to the valuation roll following the decision.
Within 30 days after such notification, such objector or owner may apply to that municipal valuer, in writing, for the reasons of the decision.
30 days of the date on which the decision was taken.
An appeal lodged in terms of this section does not defer a person's liability for paymentof rates beyondthe date determined for payment.
The MEC for localgovernmentmust, bynotice in the provincial Gazette, establish as many valuation appeal boardsin the province as may be necessary, but not less than one in each district municipalityand each netropolitan municipality.
Functions to hear and decide appeals against the decisions of a municipal valuer concerning objections to matters appearing on, or omitted from, the vaiuation roll of a municipality in the area for whichit was established in terms of section 49; and to review decisions of a municipal valuer submittedto it in terms of section 46.
52 No. 24589 GOVERNMENT GAZETTE, 18 MARCH 2003 not less than twoand not more than four other members with sufficient knowledge and experienceof the valuation of immovable property and methods of valuation.
Thechairpersonandmembers of theappealboardare appointed by theMEC for local government giving due consideration to the gender balance of the valuation appeal board.
A person may be a member of more than one appeal board.
a person declared to beof unsound mindby a court of the Republic; or a person who, after 24 April 1994, was convicted of an offence and sentenced to imprisonment without an optionof a fine for a periodqf not less than12 months.
A disqualification in terms of subsection (1) (d) ends five years after imprisonment has been completed.
A member of an appeal board who is a councillor or an employee of a municipality must withdraw from the proceedings of the board if a matter concerning that municipality's valuation roll is considered by the board.
The term of office of members of an appeal board is four years, but members are eligible to be re-appointed.
The Ministermust, afterconsultationwiththe MECs for local government, determine the conditions of appointment of members of the appeal board.
The municipality or municipalities for which the appeal board was established in terms of section49 must remunerate the members of an appeal board in accordance with their conditions of appointment and the directions of the MEC for local government.
may not use the position or privileges of a member for private gain orto improperly benefit another person; or may not act in any other way that compromises the credibility, impartiality, indepecdence or integrity of an appeal board.
A memberof an appeal board who contravenes or fails to comply with subsection(1) is guilty of misconduct.
is no eligible or longer to be a member;.
The MEC for local government may removefrom office a member of an appeal board but only on the grounds of misconduct, incapacity or incompetence.
The MEC may suspend a member of an appeal board who is under investigation in termsof subsection (3).
If the chairperson is absent or not available, or if there is a vacancy in the office of a chairperson, the other members of an appeal board may elect one of them to preside at the meetingor to act as chairperson.
Anappealboardmayrequire a municipality whosevaluationroll is under consideration to provide it with the necessary office accommodation and other administrative assistance, including staff for the board.
60. Anappealboardmaydetermine its internal proceduressubject to any procedures that may be prescribed for its proceedings to dispose of appeals.
A question before an appeal. boardis decided by a'supporting vote of at least a majority of the membersof an appeal board.
A municipalvaluermustadjust the valuation roil in accordance with the decisions taken by an appeal board.
Any adjustments made to a valuation roll in terms of subsection takes effect on the effective date.
If an adjustment in the valuation of a property affects the amount of the rate payableon that property, a municipal manager must-calculate the amount actually paid on the property since the effective date; and the amount payable in terms of the.adjustment on the property since the effective date; and recover from or repayto the person liable for rates on that property the difference determined in termsof paragraph (a).
Whenanappealboardgives its decision it may-issue an order with regard to costs that do not exceed an amount equal to the costs between party and party calculated in accordance with the highest scale applicable in civil casesin a court established for a district in terms of the Magistrates' Courts Act, 1944 (Act32of 1944); and order any person whose appeal or opposition to an appealinis, its opinion, in bad faith, or frivolous, to compensate the municipality concerned infull or in part for the fees and allowances of appeal board members and other costs incurred by a municipality in connection with the appeal.
to assist it in the performance of its duties.
When appointing members to% committee an appeal board is not restricted to members of the appeal board.
An appeal boardwhichestablished a committee maydissolve that committee at any time.
Section 54, read with the necessary changes as the context may require, appliesto the conditions of appointment of committee memberswho are not members of an appeal board.
Subject to the Constitution andanyotherlawthatrestrictsor prohibits entry, a member of, or any other person authorised by, an appeal board may, between07:30am and0300pm, enter upon and inspect any property thatis the subjectof an appeal or review.
in writing, require the owner or occupier of that property, or the agent of the owner or occupier, to give that member or person written particulars regarding that property which that member or person reasonably believes is necessary for the valuation.
forthepurpose of legal proceedings;or in terms of an order of court.
retain for three years a document produced in terms of paragraph (a)(ii) or (b)(ii).
Fees referred to in paragraph (a) must be paid by the relevant municipality.
The law regarding privilegeapplicableto a witness summoned to give evidencein a criminal case in a court applies to the questioning of a person in terms of subsection (1).
Anycostsawarded in any legal proceedings against an appeal board must be borne by the municipality concerned.
TheMinistermaymonitor, andfromtime to time, investigate and issue a public report on the effectiveness, consistency, uniformity and application of municipal valuationsfor rates purposes.
studies of the ratio of valuations to sales prices; and other appropriate statistical measures to establish the accuracy of the valuations, including the relative treatment of higher value and lower value property.
GOVERNMENT 18 MARCH 2003 any matter which in the opinion of the Minist; is necessary for the effective carrying out or furtherance of the objects of this Act.
declare a contravention of, or failure to comply with, any specific regulation an offence.
(0 fails to comply with a request in terms of section 26(4) to give information or wilfully supplies false or incorrect informationin any material respect.
A valuer is guilty of an offence if that valuer is grossly negligent in the exercise of the functions of office set out in section 31.
A person convicted of an offence in terms of subsection (1) or is liableto imprisonment not exceedingtwo years or to a fine as may be prescribed in applicable national legislation.
A person convicted of an offence in terms of section 71(2) is liable to a fine or imprisonment not exceeding six months.
This Act prevails in the event of any inconsistency between this Act and any other legislation regulatingthe levying of municipal rates.
Municipalvaluationsandproperty rating conducted beforethe commencement of this Act by any municipality remain valid to the extent that they comply with provincial and national legislation that existed before the commencement of this Act.
Any reference inprior provinciallegislation regulating property rates or valuations toa "local authority,'' "local council," "metropolitan local council," rural council" or other unitof local government is deemed to refer to the metropolitan municipality or local municipality within whose jurisdiction a property is located.
In the case of District ManagementAreas, anyreference in prior provincial legislation regulating property rates or valuations to a "local authority" or other unit of local government is deemed to refer to the successor district municipality within whose jurisdiction a propertyis located.
If a municipality uses valuation rolls in terms of subsection (1) that were prepared by different predecessor municipalities, the municipality may impose different rates based on the different rolls, so that the tax on similarly situated properties is similar.
This section lapses four years from the promulgation of this Act, and from that date any valuation roll that was of in force before the commencement this Act may not be used.
Section 22 does not affect the liability of a body corporate of a sectional title scheme to a municipality, a sectional title unit to the nor of the ownerof body corporate, for propeny rates levied against a valuation roil prepared before commencementof this Act.
Amendment of section 115 of Act 32of 2000 77.
amended to the extent indicated in the second column of the Schedule; and repealed to the extent indicated in the second column of the Schedule.
This Act is called the Local Government: Property Rates Act, 2003,and comes into operation on a dateto be determined by the Presidentby proclamation in the Gazette.
Title, No. and Year of Law Extent of amendment or repealNo.
19, 20 and 21 9. I MunicipalAmendmentOrdinance, 7 980 (Ordinance 1 Sections 7 to 11 NO.
Municipal Second Amendment Ordinance, 1983 (Ordinance No.
Divisional Councils Second Amendment Ordinance, 1983 (Ordinance No.
Municipal Amendment Ordinance, 1986 (Ordinance No.
No. 1 Title, No.
1 GlencoeRateExemptionOrdinance.1941 1 The whole (Ordinance No.
Development and Services Board Ordinance, 1941 Sections 8, 17(l)(d), @Ibis,(d)ter(Ordinance No.
Ordinance, 1942 (Ordinance No.
Pietermaritzburg Extended Powers Ordinance, 1942 Sections 3 and 11 (Ordinance No.
Local Health commission (Public Health Areas Section 2(1) and 4(l)(a) and (2) Control): Amendment Ordinance, 1954 (OrdinanceNo.
Weenen Town Board Water Rates Ordinance, 1957 The whole (Ordinance No.
Incorporated Area Rates Adjustment Ordinance, The whole 1958 (OrdinanceNo.
Local Health Commission (Public Health Areas Section 9(a) and (b) Control): Amendment Ordinance, 1954 (Ordinance No.
Local Health Commission (Public Health areas Section 2 Control): Amendment Ordnance, 1971 (Ordinance No.
Local Authorities Ordinance, 1974 (Ordinance No.
Local Authorities Amendment Ordinance, 1975 Section 2 (Ordinance No.
Local Authorities Amendment Ordinance, 1976 Sections 3 and 4 (Ordinance No.
1976 (Ordinance, 1976 (Ordinance No.
Amendment Ordinance, 1978 Ordinance NO.
No. Title, No.
Local Authorities Second Amendment Ordinance, Sections 3 and 4 19.
Local Authorities Second Amendment Ordinance, Sections 2 and 3 1979 (Ordinance No.
Durban Extended Powers: Amendment Ordinance, Section 14, 15 and 16 22. Section 3 Pinetown Extended Powers Ordinance, 1979 (Ordinance No.
Local Authorities Fourth Amendment Ordinance, Section 8 24.
Durban Extended Powers: Amendment Ordinance, Section 6 and 7 26. Local Authorities Second Amendment Ordinance, Sections 7 and8 27. Durban Extended Powers: Amendment Ordinance, Section 6 1981 (Ordinance No.
Local Authorities Second Amendment Ordinance, Section 2 29.
Local Authorities Second Amendment Ordinance, Sections7 to 11 31. Durban Extended Powers: Amendment Ordinance, Section 4 32. Local Authorities Third Amendment Ordinance,1982.
Local Government Amendment Ordinance, 1963 (Ordinance No.
Local Government Further Amendment Ordinance, 1968 (Ordinance No.
Local Government Further Amendment Ordinance, 1977 (Ordinance No.9 of 1977) Local Government Third Amendment Ordinance, (Ordinance No.
Local Government Amendment Ordinance, 1979 (Ordinance No.
LocalGovernment Amendment Ordinance, 1982 (Ordinance No.
Local Government Ordinance, 1939 OrdinanceNo.
I (Ordinance No.
I Local GovernmentAmendmentOrdinance,1978 1 (Ordinance No.
Local Authorities Rating Amendment Ordinance, 1980 (Ordinance No. 15 of 1980) Local Authorities Rating Amendment Ordinance, 1981 (Ordinance No. 7 of 1981) Local Authorities Rating Amendment Ordinance, 1982 (Ordinance No.
Local Authorities Rating Amendment Ordinance, 1983 (Ordinance No. 10of 1983) Local Authorities Rating Amendment Ordinance, 1984 (Ordinance No.
Promotion of Local Government Act, 1984 ActNo.
No. I Title, No.
I Rating of StatePropertyAct,1984Act No.
I LocalAuthoritiesAffairsAmendmentAct,1991 I Sections6 and 7 (Act No.
Western Cape Law on the Amendment of the Section 2 Divisional Councils Ordinanceof 1976, 1994 (Law No.
Local Government Ordinance Amendment Act, Section 11 1997(Act No.
Local Government: Municipal Systems Act, 2000 Section 115 amended (Act No.
Constitution (See in this regard section 229(1) of the Constitution). "Property" is not defined in the Constitution and is construed in context to mean land including any immovable propertyon or in the land or under the surface of the land. It includes all land in the Republic asthewholeoftheterritory of theRepublic is covered by municipalities. The constitutional power conferred on municipalities to levy property municipalities to exercise this power solely within their own discretion.
the national mobility of goods, services, capitalorlabour.
And secondly, section 229 (2) (b)allows national legltation to regulate the exercise of this power by municipalities.
rates in these areas; and providing uniform national rules regarding valuation and appeals, rating policy, and rate setting.
Chapter 1 of the Bill defines the terminology used in the Bill.
Chapter 2 of the Bill deals with rating.
Rates on site only or improvements only are disallowed. The rate may either be a rate based on the improved value of property or a flat rate for property within a specified valuation band, provided the band is below a prescribed valuation limit.FIat rates would accordingly only apply to areas where valuations are at the lower endof the scaie.
In terms of chapter 2 rates, withcertainexceptions, mustbeimposedonall rateable property within the municipality. The aim is that municipalities should not be selective in targeting properties for rating purposes. This provision obviously serves transparency, but is also to a perspective of a necessaryestablishclear municipality's potential revenue capacity in terms of property tax. Where there is a need to alleviate the tax burden, for instanceon the poor, the Bill envisages that this should bie effected by way of taxexemptions, rebates and reductions.
differentrates on differentcategories of residentialproperties; levy a rate on non-residential property that exceeds a prescribed ratio to the rate on residential properties; or levy rates which unreasonably discriminate between categories oi commercial properties, industrial properties or agricultural properties.
public service infrastructure, such as nationaland provincial roads, power lines running across municipal boundaries, etc.
acategory of stateproperty identified by the Minister of Finance bynotice in the Gazefte in respect of which a ratewould materially and unreasonably prejudice national economic policies, economic activities across municipal boundaries, or the national mobilityof goods, services, capital and labour.
To discourage unreasonable hikes in property rates, chapter 2empowers the Minister, actingwith the concurrence of the Minister of Finance, to set alimit, by noticeinthe Gazette, onthepercentzgebywhich rates on propertymaybe increased annually. Italsoprovides for the phasing in of rates on newlyrateable property or on property of which the owner is a land reform beneficiary. Chapter 2 in conclusion provides for additional rates to be levied in special rating districts to fund improvements exclusively in that district.
Chapter 3 of the Bill regulates liability for property tax and states the general principle that the owner of a propertymustpay the rates on the property. Joint ownersare jointly and severally liable for rates, but in the case of a sectional title scheme the owner of each sectional title unit must pay the rate on the unit. The body corporate in sectional schemeswouldnolonger be responsible for collecting and payment of rates.
82 No. 24589 GOVERNMENT GAZETTE, 18 MARCH 2003 collection of rates, the Bill contains a number 6T -additionalprovisions. These provisions relate to the method and time of payment of rates, the obligation on the municipality to furnish accountsandtherecovery of arrearsfromtenantsand occupiers and absent owners.
Chapter 4 of the Bill providesforthepreparation and implementation of a valuation roll of rateable property in a municipality. The aim of this and following chapterswasmainly to simplifytheexisting, extremelycumbersome, process of establishing valuation roils.
In terms of the new process each municipality must appointa municipal valuer to value all rateable properties in the municipality, to prepare the valuation roll andto submit the roll to the council. Two or more municipalities may by agreement appoint the same person as municipal valuer. A person who is not a municipal official may be appointed as municipal valuer only through an open, competitive and transparent 'process. A municipalvaluermust be a person registered as a valuer in terms of legislation regulating the valuers profession, but a councillor may not be appointed.
Municipal valuers will replace the existing valuation boards.
A valuation roll becomes effective as from the start of a financial year and remains valid for a period of up to four years.
Chapter 5 provides for the criteria in terms of which property must be valued. The general principle is that property must be valued according to its market value, i.e. theamount the property would realise if soldin the open market by a willing seller to a willing buyer. The techniques that may be used must accord with generally recognised valuation practices, methods and standards, and also the provisions of theBill. These include aerial photographyandcomputer assisted mass appraisal systems.
In the case of sectionaltitleschemes, eachsectional title unit must be separately valued.
Chapter 6 regulates the contents and processing of valuation rolls. It requires all rateable property to be listed on the roll, together with relevantdetails about each property and the owner.
Once a valuation rollhasbeencompleted and submitted by the municipal valuer to the municipality, the municipal manager must without delay give notice in the media that the roll is open for public inspection and that any person who wishes to lodge an objection against any entry in the roll may do so within a stated period. All objections received must thenbeconsideredanddecidedby the municipal valuer. If the municipal valuer agrees with an objection, the valuation roll must be adjusted accordingly.
10 percentupwardsordownwards, themattermust be referred to the valuation appeal board for review.
The lodging of an objection does not defer IiaBtfity for payment of rates, but if anadjustment to the valuation roll followingasuccessfulobjection affects the amount of the rate payable by the owner, the municipal manager must calculate the differenceandeitherrepay or recover the difference from the owner.
The municipal valuer's decision on any objection is not final, and an objector who is not satisfiedwith the decision, apropertyownerwho is affected by the decision or even the municipalcouncilmayappeal against the decision io the valuation appeal board.
proposed that the function to establish these appeal boards be vestedin the MEC for local government in a province. The MEC may establish as many boards as may be neededbutatleastone in each metropolitan municipality and one in each district municipality.
An appeal board must consist of a chairman who must be a person with legal qualifications and not less than two or more than four other members with sufficient knowledge and experience of the valuation of immovable property and methods of valuation. The municipalities would be liable for the cost of valuation appeal boards.
2.8 Chapter 8 provides for, but atthe sitme time strictly controls, supplementary valuations.
Included in chapter 8 are miscellaneous matters pertaining to the Bill, such as to monitor municipal valuations, to promulgate regulations in order to enhance the effectivenessof the Bill and to render certain actions criminally punishable.
Italso contains transitional arrangementswhichwould, for instance, enable municipalities to use existing valuation rolls upto 4 years from the promulgation of this Bill.
The Bill was published for public commentandappropriately adjusted in view of comments received.
Department of Minerals and Energy; 4 -.
theactual rate municipalities levy on state property.
provisions. The financial implications for local government will be quite positive.
With a broadened tax base, municipalrevenuepotential will be significantly enhanced.
74 or 76 of the Constitution appiies.