THE FEDERATION OF UNIONS OF SOUTH AFRICA
FEDUSA SUBMISSION ON THE LOCAL GOVERNMENT: PROPERTY
RATES BILL (B 19-2003)
INTRODUCTION
The Property Rates Bill will have a direct effect on the rates paid by property owners. Many of our 550 000 members own their own homes. As you are aware the process surrounding the Property Rates Bill, including where we find ourselves today, has been shrouded in controversy and speculation. In short people do not want to be confronted with increasing property rates that will further erode disposable income. Not only will this place an undue burden on workers, but it will also negatively impact on the property market. It seems as if the present Bill is not aiming to introduce a further tax, as initially predicted, hut rather to consolidate the current multitude of property rating systems. Should this assessment be correct, we would welcome the Bill. Should we he wrong and the Bill is to he used to increase the tax burden on property owners, we would strongly object to it.
Rates Policy(Section 3)
FEDUSA notes that a rates policy must treat liable persons equitably (Section 3(2)(a)). It is important that rates are levied on a uniform basis for each property category. We would therefore prefer the word 'equal", instead of equitable. Equitable suggests a level of subjectivity, while the word equal would permit more objectivity when executing the legislation in question. It is important that homeowners should pay the same rate for services received.
A differentiation of rates being levied within specific property groupings and the same specified municipal boundaries should not be permitted. The percentage of levy should he the same for each of the respective property categories. This does not mean that each property owner will pay the same amount over. Clearly the amount would increase as the value of the property increases.
It is also important, in the interest of certainty and for the sake of uniform application, that a national framework does exist. The word "may" in section 3(3) should therefore be replaced with the word "must". Section 7(2)(iii) indicates that a municipality is not obliged to levy rates on property that is difficult to value and is legally insecure. The Bill is presently silent on how this is to be determined and by whom. This should be added for this clause to have the required certainty in law.
Process of Community Participation (Section 4)
The period of display should be increased from 14 days to at least 30 days, to allow proper community participation. Every owner should be notified of their valuation in the property register .The owners should also be notified of their rights contained in the Bill. Such notifications should be sent by registered mail.
FEDUSA welcomes the drafters of the Bill having the foresight to include and emphasise public consultation in the process. No guidelines have however been given on what the next step should be after the consultation process has been concluded. This
pre-empts speculation as to whether the municipality, in coming to its final decision, is obliged to take any note of any public opinions that play differ from what the municipality has in mind, as well as to what should happen if the municipality goes ahead despite a dispute on some issues. The open-ended nature of the clause should therefore he addressed.
Sectional Title Schemes {Section 9)
The bill moves away from the existing practice that a body corporate remains liable for its rates. This has worked well in the past and we would require clarity as to why This has been changed and what benefit would be derived?
Rates Policy
Section 15 (2)(h) deals with a valued amount of R150 000 that will not be rateable. This section further makes reference to this amount being increased from time to time with clue consideration of inflation. FEDUSA feels that this will prejudice home owners and that the exempted amount should be increased by CPIX on an annual basis, to avoid this amount becoming too Low.
We further welcome the principle that no retrospective backdating of levies ,will be applicable and support the Minister of Finance setting the limit on the rateable (mount to be levies. as detailed in section 17. This will contribute to some checks and balances being in place, to alleviate any misconceptions currently occupying the minds of many property owners The compulsory phasing in of certain rates as detailed in section 18 will also assist in ensuring that property owners are well aware of their responsilities in terms of the provisions of the rates policy. The process detailed in section 18 should be made applicable to all property owners those rates increase with 50% or more
Valuation Appeal boards
We tail to see why a person should be on more than one appeal board and should be limited to one. Section 63(a) details the powers an appeal board will have in making cost orders against appellants. Whereas we agree with this applying in frivoluos and vexatious appeals, this provision should not be extended to each and ever appeal. t our view this clause tails foul of a persons' constitutional right of appeal and should therefore be scraped
Conclusion
it is important that we have a uniform, workable property rating system that is both fair nod certain in law. Acquiring and maintaining a home is a costly affair .The bill before us should not add to this burden , but rather provide a standardised and certain environment that promotes home ownership and protect the property