Draft Rates Policy

Changes proposed in terms of the Municipal Property Rates Act, 6 of 2004 will affect the way in which the general valuation roll and rates policy of the City is determined. These changes affect all municipalities nationally.

Some of these changes and implications include:

  • The Municipal Property Rates Act, 2004 requires that the municipality will apply different tariffs to the various categories of property. At present a single tariff is applied with various rebates and remissions, whereas the new system will require different tariffs per category.
  • Properties will be valued and rated based on the market value of the land and improvements as a single unit. Currently only the land value of the property is rated. The Act defines the market value of the property as the realistic price of a property in the open market between a willing buyer and willing seller.
  • Sectional title units will have to be valued individually and owners will now have to be rated individually. Property rates are currently levied on the land value of the complex, and are levied against the body corporate. The new method implies that the details of all sectional title properties with owner details need to be sourced, separate accounts opened and each unit valued individually, as well as the proportionate share of the common property to each individual unit.

The effective date of implementation of the Rates Policy and general valuation roll will be 1 July 2008. Prior to this all interested parties, including property owners and residents are urged to comment on the draft policy.

What will change in terms of the new act?

CURRENT SYSTEM IN TERMS OF ORDINANCE

NEW SYSTEM IN TERMS OF THE MUNICIPAL PROPERTY RATES ACT, 2004

Rates levied on land value only (although the Ordinance did permit improvement rating to be levied).

Rates to be levied on the market value of the property, the value of the land and the improvements.

Rates on property held under Sectional Title were levied against Body Corporate.

Rates to be levied against each individual holder of Sectional Title.

No need for categorisation of property.

Properties to be grouped according to category based on permitted use (zoning) of the property, or, actual use of the property, or geographical area in which the property is situated.

Standard (uniform) assessment rate tariff levied against all types of property.

Different assessment rate tariffs may be levied against different categories of property.

Private Schools exempt from assessment rating.

Automatic exemption no longer applicable. Municipal Council can decide on rebate.

Full value of residential property subject to assessment rating.

First R15 000 of all residential property value not rateable.

Objections to a land value to be heard by an independent Valuation Board.

Objections to a property value to be heard by the Municipal Valuer.

Each property to be individually inspected for valuation purposes.

Physical inspection of the property to be valued is optional, and Comparative, analytical and other systems may be used including aerial photography and computer assisted mass appraisal systems may be used.

No formal rates policy required

Council to formulate rates policy and follow a process of community participation in having this policy approved. Thereafter, the rates policy to be reviewed annually.

Article by: www.g7prop.com