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Municipal Property Rates Act 6

According to Alan Stephenson and Greg Cowden, professional valuers at Mills Fitchet, the "new" Municipal Property Rates Act 6 of 2004 (MPRA), is the new-no-more and well entrenched!


"South African property owners are feeling a bit bruised and battered firstly by the implementation of the new Municipal Property Rates Act 6 of 2004 (MPRA) and then by the sudden economic downturn as a result of the global recession," they say. The first round of municipal valuations conducted in terms of the MPRA were conducted over the past four years and completed in 2008, with the last batch of new valuation rolls being implemented in 2009.


"Given the monumental task of valuing every property in the country based on new legislation and un-tested principles, the implementation has gone relatively well, although there have been some inconsistencies in values experienced in both large metros and small municipalities alike. In addition, there has been much controversy surrounding the MPRA and the new property values, particularly regarding the effect on the man-in-the-street, pensioners and on certain property categories."


"One of the main property categories that came under the spotlight is agriculture, the reason being that most properties were not previously valued or rated, and municipalities in many cases were not sufficiently experienced in setting equitable and workable rate randages to suit the new property mix with an agricultural component. This has caused some hardship in the agricultural community. However, new "ratios" have recently been gazetted which will serve to govern the ratio between the residential category, which has been set as the benchmark at 1, and the agricultural category, which may not be more than 0,25 of the residential benchmark. There is still some confusion regarding the interpretation of these ratios, but no doubt this will be resolved in due course."


"There has also been questionable budgeting by some municipalities and the implementation of rate randages that are completely out of line in terms of generally accepted norms. Rate payers can take comfort in that the Municipal Property Rates Act allows for an objection to be lodged against any matter reflected in or omitted from the valuation roll. This provides some recourse to the property owner. However, it must be noted that there are set time frames within which to lodge an objection and there are specific objection forms that need to be completed in order to ensure that the objection is valid."


"The new property valuations and rates related issues have given risen to a new initiative by a company called "Rates Watch" which provides a service to rate payers to ensure that they are not being burdened with more than their fair share of property rates. From a provincial government aspect, the KwaZulu-Natal Department of Local Government and Traditional affairs has set up a special task team comprising representatives from government and professionals from the private sector to monitor and assist KwaZulu-Natal municipalities with the implementation of the MPRA and to investigate and make recommendations to government with a view to amending and improving the existing MPRA and the Municipal General Valuation Process. "There is no escaping the old saying 'Give to Caesar what is Caesar's' provided of course it is based on a fair valuation!"