PROPERTY RATES BILL
CHAPTER 1
The following comments are recommended with regards to this chapter on interpretation - definitions.
"Existing rateable property": the date of implementation should be amended, taking into consideration that June 2002 has already passed. The date shall be changed to "prior to implementation" so that it becomes responsive to any date of promulgation of the Bill.
Additional change for the phasing-in period to " 4 years after implementation" and not the current 2004 as reflected in the Bill.
"improvements": The definition should be altered to read …..whether movable or immovable.. to include "adding value" in the definition.
It is proposed that (a) under improvements be changed to read ….a "temporary" structure solely for such a building……..This shall bring clarity presently lacking in the Bill, that the exemption is for a temporary structure.
"Land tenure right": there is direct conflict with the Communal Land Rights Bill and care should be taken when the latter Bill is deliberated on. The property rates Bill provides for differential rates, while the Communal Land Bill would result in the communal land not being susceptible to rating. Furthermore, the definition on land tenure does not correspond in the two Bills.
"Newly rateable property": This definition should be amended to read: "means rateable property on which no property rates were levied prior to implementation, but includes property that had been incorrectly excluded from the valuation roll".
"owner":
(a) in relation to property referred to in paragraph (a) of the definition of "property", means –
The person in whose name the property is registered and in the case of a sectional title scheme, the person in whose name a sectional title is registered;
The definition of owner should therefore, not be separated into two definitions but the word "and" be inserted to make it one sentence. There should be no separation between the normal deed, i.e. private residence and the sectional title owner.
Under the same definition we recommend that usufructuary be reviewed
the usufructuary, in the case of a property that is subject to a usufruct;
We propose that the words "the usufructuary" at the beginning be deleted and usufruct at the end as well. The following words be added "personal servitude in whose name the servitude is registered." The sentence should read –
"in the case of a property that is subject to a personal servitude in whose name the servitude is registered; or
The following as per our position should be changed with regard to lessee
the lessee, in the case of property that is registered in the name of the municipality and is leased by it;
"The lessee" should be replaced by "the person" and the additional words be added at the end as follows –
" the person, in the case of property that is registered in the name of the municipality and is leased by it from the date in which such person may take occupation of such property.
"Prescribe": means prescribe by regulation in terms of section 71 of this Act.
The words "of this Act" need to be added to the definition.
"property": means –
The definition should read as follows:
Immovable property including sectional title units registered in the name of a person;
The words "including sectional title unit" are to be inserted in order not to differentiate between kinds of owners of residential properties
"public service infrastructure":
It is recommended that power stations and substations be deleted from the public infrastructure list.
Delete the words "power stations, substations" to read as follows:
Power lines forming part of an electricity scheme serving the public across a municipal boundary. Power stations are structures, and therefore subject to rates.
(g) runaways and aprons at national and Provincial airports.
"or" was replaced by "and". The word "and" indicates inclusiveness.
"rate":
The following words "an amount in the rand and is" were inserted in the definition to read as follows:
"rate" means an amount in the rand and is a municipal rate on property as envisaged in section 229 (1) (a) of the Constitution;
"register": The word was adjusted to read "registered"
"registered"
The words "to record in" were deleted to read:
means registered in terms of –
CHAPTER 2
RATING
Part 1: Rates policy
Section 6 (2) (a): By–laws to give effect to property rates policy
Amend to read "different categories of property subject to section 16 (1) (a)"
Section 8 (3)(e)
"unused farm property" - The term unused is not clear, more so as it is not defined under the definitions chapter. It is proposed that the word unused is removed, and only farm property be used in Bill to limit misintepretation of any form.
Section 8 (f)
It is proposed that the whole subsection be amended to read
Agricultural holdings used for –
residential purpose;
industrial; or
commercial purposes
A combination of i - iii
"small holdings" to be replaced by "agricultural holdings". "Small holdings is regarded as a more clearer definition. A new (iv) is proposed as noted.
Section 8 (h)
"non-formal" is not defined. The word informal is commonly used and understood. It is thus suggested that the Bill adopts a term that is commonly used.
Section 8 (i)
Clear indications must be given whether municipalities will be able to tax tribal and other forms of communal land, simply because the Communal Land Rights Bill is not in line with the Property Rates Bill.
Section 9: Levying of rates on property in sectional title schemes
This section is in conflict with Section 15(b) (3) of the Sectional Title Act, 1986. It was recommended that Section 15 (b) (3) of the Sectional Title Act, 1986 may need to be amended for this section in the Bill to pass.
Section 10 (1) (a): Amount of rate
Amend to read " Rate based on the improved value of the property as reflected on the municipality’s current valuation roll"
Section 10 (1) (b)
"fixed" amount should be used instead of "flat" rate.
Section 10 (2)
Amend to read "The fixed amount in terms of subsection (1) (b) may not exceed the amount that would otherwise have been payable on properties in the lower end of the valuation band had the rate been levied in terms of subsection (1) (a).
Section 14
The provision of exemptions, reduction and rebates is acceptable. However, reference is made here that guidelines should be produced on how these are going to be determined by municipalities. This would limit uncertainty and ensure conformity in the implementation of this Bill.
Part 3: Limitations on levying of rates
Section 15 (2) (h)
The Bill provides that "All residential property…. The principle that is being provided is in line and SALGA supports the R 15 000 deduction, it must however be stated that in some areas (specifically rural) this provision might seriously affect revenue derived from rates. SALGA’s position on this issue is that the loss of income with regard to this must be recognised and provision must be made in the Division of Revenue Act, to assist municipalities.
Section 18
It is proposed that the phasing-in period should be applicable only to residential property.
Part 4: Additional rates
Section 19 (2) (c): Special rating areas
There seems to be no need to establish a committee because Structures Act and the IDP already provides for ward committees to serve as consultative and advisory forums for the municipality. It is proposed that this be revised to take note of these useful systems already in existence.
CHAPTER 3
LIABILITY OF RATES
Section 21 (2): Property rates payable by owners
Amend to read "Joint owners of property including sectional title scheme are jointly and severally liable for the amount due for rates."
Section 23 (a)
The payable annual amount can be paid periodically and in instalments or equal in amount. This statement is prescribing to the occupier. The argument is that the annual amount should be paid in periodic monthly instalments or equal in amount. Monthly instalments, though a better practice as it would tie up with the principle of a consolidated account as per the Municipal Systems Act, should provide for the option of payment that enables municipalities to have some level of income certainty and predictability. It is as such proposed that the payments be equal amounts, and where an annual amount is paid, that should be done at the beginning of the financial year the rate is due.
Section 24 (c)
"The basis of calculation of the amount’ - Needs to be defined.
Section 24 (2)
It is proposed that this section is replaced by the text that was in the November draft Bill which read "The fact that a person liable for the payment of a rate has not received an account sent by a municipality to that person’s physical address, as recorded in the municipal property register, does not affect that person’s liability to pay amount due".
Section 26: Absent owners
"Absent owners" is not defined under intepretation. It is further proposed that this is strengthened to cover derelict property
CHAPTER 4
GENERAL VALUATION OF RATEABLE PROPERTY
Part 1: General
Section 29 (1) (a): Commencement and period of validity of valuation rolls
Amend to read "A valuation roll – takes effect as from the start of the financial year closest to completion of the public inspection period required by section 42".
"Code of Conduct" – must specifically refer to the Act.
Part 2: Municipal Valuers
Section 30 (3)
SALGA observes with concern, different legislations using the provisions of the amended section 139 of the Constitution unfavourable to municipalities. It is on such basis that we recommend the section is removed form the Bill, as it is not found to be appropriate in this regard.
CHAPTER 5
VALUATION CRITERIA
Section 39 (2) (a): General basis of valuation
Amend to read "the value of the property must reflect any licence relating to the property".
The words "or privilege" must be deleted from the sentence.
CHAPTER 6
VALUATION ROLLS
Section 41 (2) (g): Contents of valuation rolls
This provision should be deleted. It is not seen to be relevant, because the postal address of the owner must be in the Debtors ledger of a municipality.
Section 42 (b)
Amend to read "Notify in writing every owner of property reflected in the valuation roll the copy of the notice referred to in paragraph (a) together with an extract of the valuation roll pertaining to that owner’s property.
Section 43 (1) (b): Inspection of and objections to valuation rolls
Amend by replacing "appearing" with "reflected" to read as follows:
"Lodge an objection with the municipal manager against any matter reflected on or omitted from the roll."
Section 44 (b)
Amend by inserting "and substantiated" to read as follows:
decide objections on facts, including facts submitted and substantiated by an objector, and, if the objector is not the owner, by the owner
Section 45 (2) (a) (ii)
Proposed that the section is amended to read "the amount due for rates on that property payable in terms of adjustments on the property since the effective date"
Section 47 (3): Notification of outcome of objections and furnishing of reasons
Amend to read "The municipal valuer must within reasonable time provide the reason for the decision in writing, after payment of any prescribed fee".
An addition was also made as follows:
Subsection 4 was added to read: "Where the municipal valuer is not an official of the municipality, the municipal valuer may require a municipality for accommodation etc.
CHAPTER 7
VALUATION APPEAL BOARDS
Section 49: Establishment
Amend to read, "The MEC for local government must by notice in the provincial Gazette establish as many valuation appeal boards in the province as may be necessary, but at least one in each District municipality and each metropolitan municipality."
Section 50 (a): Functions
Amend by replacing "appearing" with "reflected" to read thus "to hear and decide appeals against the decision of a municipal valuer concerning objections to matters reflected on or omitted from the valuation roll of a municipality in the area for which it was established in terms of section 49".
Section 54 (3): Conditions of appointment
Amend to read "The municipality or municipalities for which a valuation appeal board was established in terms of section 49 must remunerate the members of the board at least in accordance with their conditions of appointment and the directions of the MEC for local government."
Section 58 (3): Meetings
Amend to read "if the chairperson is absent or not available, or is there is a vacancy in the office of the chairperson, the other members of the board may elect one of them to preside at the meeting or to act as chairperson subject to the provisions of section 51 (1) (a) of this Bill".
Section 62 (3): Decisions affecting valuation rolls
Amend to read "If an adjustment in the valuation of a property affects the amount due for rates payable on that property, the municipal manager must …".
Section 60 (1) (d): Supplementary valuations
"Of which the improved value has substantially increased or decreased for any reason after the last general valuation ---".
The purpose of a supplementary valuation roll is to maintain the valuation roll for the period of validity of such valuation roll. The principle is therefore not to make changes to the Roll when for instance the economy slows down and property values drop, this needs a compilation of a General Valuation Roll. The wording of (for any reason) can therefore be very problematic to the Valuer and Council. The effect will also be that the ratepayers will use this opportunity to call for supplementary valuations on an ongoing basis (the underlying motive being to have the rates lowered.
Section 69 (4): Supplementary valuations
Amend to read "A rate on rateable properly for which a supplementary valuation roll was prepared takes effect as from the date the registration of the property in the Deeds Office takes effect.
CHAPTER 9
MISCELLANEOUS MATTERS
Section 71 (4): Regulations
Amend to read, "Regulations in terms of subsection g (1) may treat different categories of property, or of property owners in accordance with---"
Section 75 (2): Transitional arrangement: Use of the existing valuation rolls
Amend to read "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 amount due for on similarly situated properties is similar.