POLOKWANE – A new Property Rates Policy for the 2014/15 financial year was tabled and accepted during the Polokwane Municipality’s council meeting held in the last week of June.
Following much opposition to the initial published draft policy, regarding legal and constitutional compliance issues, it seems council has mostly reverted to the original rates policy, and the policy was tabled and accepted to be implemented on July 1.
Pietersburg District Agriculture Union chairperson for local government, Dawid Maree, said 80% to 90% of the new rates policy was based on the previous policy. He said the agricultural union would have preferred the old policy; farmers were going to pay more, but “it was much better than the draft policy initially proposed by the municipality.”
Michiel de Bruin, a local attorney and developer who represents several big local property developers also said most of their proposals were accepted in the last draft policy he had seen and that the municipality had cooperated well with them by accepting their proposals.
Neil Gopal from the South African Property Owners Association said he was pleased that most of their concerns regarding the draft property rates policy were addressed in the final version tabled.
Some major changes:
• The definitions of “illegal use” was included in the final policy.
• The definition of property was amended to bring it in line with the definition of the Municipal Property Rates Act (MPRA).
• Vacant land forming part of the remainder of the township will be rated at the same tariff as residential property. The remainders of townships get an additional 20% rebate, which will afford much-needed relief to developers.
• The definition of vacant land was amended to ensure that vacant land forming part of the remainder of a township will not be categorised as vacant land. The ratio on vacant land also remains at 4,5.
• With regard to exemptions, reductions and rebates, Gopal said some categories of owners or properties received rebates during the 2013/14 financial year but was omitted from the first draft policy for 2014/15. As a result of SAPOA’s intervention these categories of owners and properties will now be receiving rebates.
• In terms of clause 8.7 property owned by the municipality used for service delivery is exempted from rates.
This means that property that is let by the municipality will also be exempted. Gopal said it was surely not the intention to exempt all municipal properties from the payment of rates.
• Bona fide farmers: these farmers may receive a rebate of 75%. Sapoa’s interpretation is that this rebate is in addition to the reduced tariff as a result of the ratio regulation. To qualify, the owner must derive his principal income from farming activity.
• Properties with high values: the introduction of a rebate of 40% on properties with values above R500 million was positive, according to Gopal.
“It should be noted that the rebate structure does not result in continuous rates. Rates payable by properties around the break points are distorted. For example properties with values between R45 million and R49,9 million will pay more rates than properties valued at R50 million.”
He said the structure benefitted properties at the lower end of the different value brackets and the problem would be solved if the wording was changed.
“Although the overall rebate will be less, it will be more equitable and fair.”
• Multi-purpose properties: the application of dominant use in clause 10 was in conflict with section 9 of the MPRA. The values of properties used for multiple purposes must therefore be apportioned in terms of section 9(2) of the MPRA and rates levied on the different categories.
