DRAFT MUNICIPAL RATES POLICY
2021/2022
INDEX
1. Background 2. Definition
3. Objective of the policy
4. Responsibility and accountability 5. Basis of rating
6. The categories of properties
7. Rebates, Exemptions and Reductions 8. Rates Policy Annual Review
9. Frequency of Valuations 10. Notification of Rates 11. Payment of rates
12. Constitutionally Impermissible Rates 13. Impermissible Rates
14. Phasing in Provision 15. Commencement
16. Interpretation of this Policy
17. Permanent/temporary waiver or suspension of this Policy 18. Compliance and enforcement
19. Amendment and/or abolition of this Policy.
1. Background
The rates policy as set out in this document arises from and is prepared in keeping with the tenor of the preamble and the detail of the legislation in the Local Government : Municipal Property Rates Act No. 6 of 2004. All of the provisions contained in that legalisation have been taken into consideration in the preparation of this rates policy.
2 Definition
For the purpose of this policy, any word or expression to which a meaning has been assigned in the Act, shall bear the same meaning in this policy, and unless the context indicates otherwise –
3 Objective of the policy
The objective of this policy is to:
3.1 comply with the provisions section 3 of the Municipal Property Rates Act, 2004 (Act No. 6 of 2004);
3.2 determine the methodology and to prescribe procedures for the implementation of the Act;
3.3 determine criteria to be applied for the levying of differential rates for different categories of properties;
3.4 determine or provide criteria for the determination of categories of properties and categories of owners of properties for categories of properties;
3.5 determine criteria to be applied for granting exemptions, rebates and reductions
3.6 determine how the municipality’s powers must be exercised in relation to multi purpose properties;
3.7 determine measures to promote local economic and social development; and
3.8 identify which categories of properties the municipality has elected not to rate as provided for in section 7 of the Act.
4 Responsibility and Accountability
The Council accepts responsibility for laying down Rates Policy.
5 Basis of rating
In accordance with the Municipal Property Rates Act Council shall impose a rate in the rand on the market value of all rateable property as recorded in the valuation roll and supplementary valuation roll subject to the provisions of this rating policy document.
The municipality has resolved to levy different rates for different categories of rateable properties according to the use of the property except where the property is not developed, in which case legally permissible use (zoning) shall form the basis of rating .
6 The categories of properties
The valuation roll shall include all categories of properties, where applicable, as set forth in Section 8(2) and 9(1) of the Municipal Property Rates Act. The property used for multiple purposes will be assigned to a category determined by the municipality according to the dominant use of the property.
CATEGORY Randage Rebate RATIO
Residential 0.015978 30% 1:1
Vacant Land earmarked for residential 0.016344 30% 1:1.022908385
Business & Commercial 0.031957 20% 1:2.285797024
Industrial 0.031957 20% 1:2.285797024
Vacant Land earmarked for business 0.033151 20% 1:2.371164722
Organ of state (Public Service) 0.039946 0 1:3.571480283
Organ of state (Residential) 0.015978 0 1:1.428571429
Agriculture 0.003994 40% 1:0.214285714
Public Service Infrastruture 0.003994 100% 1:00
Public Benefit Organisation 0.002796 0 1:0.25
Place of Worship 0 0 1:00
Municipal 0 0 1:00
Multiple used property It will be based on dominant use
Notification of outcome of objections and furnishing of reasons a) Application fee for reasons for the valuer’s decision :R475.00
b) Appeal application :R180.65
7 Rebates, Exemptions and Reductions
In terms of Section 15 of the Act the Municipality may exempt a specific category of owners of properties, or the owners of a specific category of properties from payment of the rate levied on their property or grant a rebate on or a reduction in the rates payable in respect of their properties as determined by Council resolution. Such exemptions, reductions or rebates apply to the owners of properties in the following categories:
(i) Indigent owners;
(ii) Owners dependant on pensions or social grants for their livelihood;
(iii) Owners of properties situated within an area affected by a disaster or any other serious adverse social or economic conditions;
(iv) Owners of residential properties with a market value lower than amount determined by the Municipality; and
(v) Owners of agricultural properties who are bona fide farmers;
(vi) Owners of properties who are temporarily without income,
The Municipal manager must annually table in the Council the list of exemptions, reductions and rebates granted by the Municipality during the previous financial year and the income forgone as a result of such exemptions, reductions and rebates.
The exemptions, reductions and rebates projected for any financial year must be reflected in the Municipality’s annual budget.
Besides annually reviewing the rates policy must consider and access the need for increasing rates.
7.1 REBATES FOR CATEGORIES OF OWNERS OF PROPERTIES
The municipality has resolved to grant the following rebates, to the following categories of owners:
Category Of Owner Household Income/Applicant
Age from
Household Income/Applicant
Age to
Percentage Rebate
Indigent persons Nil Amount Equal to 2
state pensions 100%
Child headed
households (see criteria below)
Nil Amount Equal to 2
state pensions 100%
A pensioner or Retiree or Disabled person or Medically boarded
60 – 65 years 60 – 65 years
55%
A pensioner or Retiree or Disabled person
66 – 70 years 66 – 70 years
75%
A pensioner or Retiree or Disabled person
71 years and
above 71 years and
above 100%
In order to qualify for rebates above, applicants must:-
7.1.1 be the sole owner of the property or owned jointly with his/her spouse;
7.1.2 be living permanently on the property;
7.1.3 not own any other property; nor the spouse own any other property;
7.1.4 no renting out of any part of the property;
7.1.5 have an aggregate household income of all persons living on the property as reflected in the table above;
7.1.6 submit water & electricity bills for the last three months.
7.1.7 provide proof of identity in the form of an identity document of both applicant and spouse;
7.1.8 substantiate items 7.1.2, 7.1.3 & 7.1.4 above by way of a sworn affidavit before a Commissioner of Oaths;
7.1.9 provide proof of gross income on a sworn declaration and supported by way of documentation of three months’ bank statements, pension slips, investment interest and any other income. These are to be supported by the SARS document no. IT34 (the full document)
7.2.0 produce a medical certificate from the pension fund to say medically boarded if the application relies on a medical basis for the rebate. Doctors’ & Hospital certificates/reports do not count;
any other supporting documents specified by the municipality from time to time;
7.2.1 submit written application for rebates for the financial year which must be lodged in the prescribed format with the Municipal Manager on or before 31 March in the year prior to the financial year for which application is being made;
7.2.2 a person who turns 60 within the financial year can apply for a rebate before turning 60 but would only receive the rebate once they have turned the designated age;
7.2.3 consideration be given to those that become medically boarded after the deadline of “June” and how they would be assisted in terms of indigency;
7.2.4 if an applicant is found to have provided fraudulent information with regard to any material condition for registration for a rebate, such person shall be liable to repay the Municipality with immediate effect all relief received from the date of such fraudulent registration;
7.2.5 councillor not to sign affidavit nor sign as Commissioner of Oaths – conflict of interest;
7.2.6 the property must be registered in the name/s of a natural person and not a company nor close corporation.
7.2.7 The rebate will be valid for 12 months thereafter the customer must reapply.
7.2.8 The rebate will only be granted on the primary property
7.3 The Council may grant relief in respect of the payment of rates, in the form of a rebate, exemption or reduction in terms of Section 15 of the Act. The Council has determined that the rebate, exemption or reduction listed shall apply for the following categories of properties:
7.3.1 Public service infrastructure 100%
7.3.2 Municipal owned properties: 100%
7.3.3 Business&Commercial – fixed rate for four years until 2023 20%
7.3.4 Residential – fixed rate for four years until 2023 30%
7.3.5 Agriculture – fixed rate for four years until 2023 40%
7.3.6 National monuments: 100%
7.3.7 Public benefit organisations: 75%
7.3.8 Incentive for new development - fixed rate for three years until 2022 50%
The commercial, residential and agricultural rebates are automatically granted to the above properties,
7.4 A CHILD HEADED HOUSEHOLDS:
A Child Headed Household may receive a 100% rebate, subject to the following:
7.4.1 A “Child Headed Household” may be required to be investigated by a social worker from the Department of Social Welfare Development and declared as such.
7.4.2 The minor must be the owner or the authorised beneficiary of the property;
7.4.3 The minor assuming responsibility must be the eldest of the siblings, if any 7.4.4 The minor/s must reside permanently on the property;
7.4.5 Total income of household must not exceed the amount of two State welfare pensions
7.4.6 The Application must be accompanied by:
I. a copy of the letter of Executorship or Administration of the Deceased Estate;
II. a copy of the Liquidation and Distribution Account showing transfer of the property to the minors
III. the death certificate of the parent;
IV. birth certificates of all minors residing on the property.
7.3.8.6 Applications must be renewed annually, and may be required to be Confirmed by the Department of Social Welfare
7.3.8.7 The rebate will lapse:
CHILD HEADED
i. when the minor reaches the age of majority, which is 21 years old;
ii. on alienation of the property;
iii. when the minors ceases to reside permanently on the property;
iv. if the Department of Social Development no longer regards the household as being Child Headed
v. if applications are not submitted annually.
7.3.8.8 PENSIONERS/SENIOR CITIZENS & DISSABILITY I. when the property has been sold
II. when the applicant is no longer residing on the property III. on the death of the applicant
IV. If application has not been renewed /submitted annually before the closing date
7.5 Exemptions
7.4.1 Old age, disability and indigency
(Subject to credible proof by way of affidavit and relevant supporting documentation, any person who is in receipt of an old age or disability grant, or who is unemployed and has no other source of income, and who is the owner of a single property, shall be exempt from the payment of any rates for so long as such condition exists. Credible proof shall be furnished, as stated, by no later than the end of October in each and every year that such condition applies to the person concerned and shall be taken into account by the Municipality in the preparation of its budget for the forthcoming year.
7.2.2 Residential properties
All residential properties with the market value of less than R40 000.00 are exempted from paying rates. The R15 000.00 impermissible rates contemplated in terms of Section 17(1)(L) of the Municipal Property Rates Act is included in the amount of R25 000.00.
7.5 Reductions
A reduction in the municipal valuation as contemplated in the Act will be granted on the receipt of an application, where the value of the property is effected by:- 7.5.1 A disaster within the meaning of the Disaster Management Act, Act No 57 of 2002;or
7.5.2 Any other serious adverse social or economic conditions.
The Municipal valuer will be required to provide a certificate issued for this purpose in order for a reduction to be applied. The reduced value shall be reviewed as soon as the defect is cured.
8 Rates Policy Annual Revenue
The Council shall review its rates policy annually and if necessary, amend its rates policy. Should the Municipality amend its rates policy, the amendment must accompany the Municipality’s annual budget when it is tabled before Council in terms of the Municipal Finance Management Act and the Municipality must follow the community participation process envisaged in the Municipal Systems Act.
8 Frequency of Valuations
The Municipality must prepare a new valuation roll every five years and supplementary valuation rolls annually.
9 Notification of Rates
The Municipality will give notice of all rates approved at the Annual Budget Meeting at least 30 days prior to the date that the rates become effective and will publish its resolution passed by the Council with a supporting vote of a majority of its members in the Provincial Gazette.
The publication will indicate the date on which the new rates become operational and will be displayed by the Municipality at places identified for that purpose, including the Municipality’s head and satellite offices and libraries, and its official web site; as well advertising in the media a notice stating that such a resolution has been passed and state where the resolution is available for inspection.
Accounts delivered after the 30 day notice will be in terms of the new rates levied in terms of the aforementioned resolution.
10 Payment of rates
10.1 Rates payers may elect to pay rates annually in one instalment on or before the 30th SEPTEMBER of that rates year; alternatively in 12 equal instalments on or before the last working day of the month following on the month in which the rate becomes payable.
10.2 Interest on arrear rates, whether payable annually or monthly, shall be levied at the maximum rate permitted by prevailing legislation.
10.3 Property owners who are responsible for payment of rates in terms of this policy and who fail to pay such rates in the prescribed manner, will be subject to recovery of arrear rates in accordance with the Municipality’s credit control, debt collection and indigent policy.
10.4 Arrear rates shall be recovered from tenants, occupiers and agents or the owner, in terms of Section 28 and 29 of the Act.
11 Constitutionally Impermissible Rates
The Municipality may not exercise its power to levy rates on property in the matter that materially and unreasonably prejudices national economic policies, economic activities across its boundaries, or the national mobility of goods, services, capital and labour.
12 Impermissible Rates
The Municipality may not levy rates on the following properties:
12.1 The first 30% of the market value of public service infrastructure;
12.2 Those parts of a special nature reserve, national park or nature reserve or national botanical garden which are not developed or used for commercial, business, agricultural or residential purposes;
12.3 Property belonging to land reform beneficiaries or his or her heirs, subject to the provision that such exclusion will lapse ten years from the date on which the beneficiary’s title was registered in the office of the Registrar of Deeds.
12.4 The first R15 000.00 of the market value of a property reflected in the Valuation Roll or Supplementary Valuation Roll as residential property.
12.5 Properties registered in the name of and used primarily as places of public worship by religious communities including the official residential property of an office bearer of that community who officiates at services at the place of worship.
13 Phasing in Provision
Land reform beneficiaries will receive the benefit of the phase in for a three year period after the expiry of the ten year exclusion.
The Public service Infrastructure will benefit from a five year phase n period as per Amended MPRA
Newly rateable property owned and used by organisations conducting specific public benefit activities will not be required to pay any rates in the first year, and thereafter will receive the three year phasing in benefit.(delete)
14 . COMMENCEMENT
This Policy will come into effect on the date of adoption by Council.
15. INTERPRETATION OF THIS POLICY
15.1 All words contained in this policy shall have the ordinary meaning attached thereto, unless the definition or context indicates otherwise.
15.2 The dispute on interpretation of this policy shall be declared in writing by any party concerned.
15.3 The Office of the Municipal Manager shall give a final interpretation of this policy in case of written dispute.
15. PERMANENT/TEMPORARY WAIVER OR SUSPENSION OF THIS POLICY 15.1 This policy may be partly or wholly waived or suspended by the Municipal
Council on temporary or permanent basis.
15.2 Notwithstanding clause No. 14.1 the Municipal Manager may under
circumstances of emergency temporarily waive this policy subject to reporting of such waiver or suspension to Council.
16. COMPLIANCE AND ENFORCEMENT
16.1 Violation of or non-compliance with this policy will give a just cause for disciplinary steps to be taken.
16.2 It will be the responsibility of Council to enforce compliance with this policy.
17. AMENDMENT AND/OR ABOLITION OF THIS POLICY
This policy may be amended or repealed by Council as it may deem necessary.
