Real Estate Investor Magazine South Africa June 2015 | Page 38

LEGAL

Municipal Property Rates

Amendment Act
How this Act affects landlords
BY MARLON SHEVELEW

T

he beginning of next month sees the
implementation of the Local Government:
Municipal Property Rates Amendment Act.
Previous experience has suggested that the Act needed
to evolve to correct certain flaws and to minimise legal
and policy ambiguities that have arisen since the original
Act was implemented. The amendments therefore
purport to strengthen its application, clarify certain
aspects and provide greater support and monitoring
through provincial and national government for those
municipalities that require it.
The amendments are largely technical in nature and
certainly do include some welcome additions.
According to the Presidency, the Act seeks primarily
to:
• Regulate the categories of properties in respect of
which rates may be levied;
• Regulate the time frames of publication of
the resolutions levying rates and what must be
contained in the promulgated resolution;
• Provide for the exclusion from the rates of certain
categories of public service infrastructure; give
powers to a municipality to levy different rates on
vacant land;
• Give power to the Member of the Executive
Council (MEC) of local government to extend
the validity of a valuation roll by an additional two
years; and to
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JUNE 2015 SA Real Estate Investor

• Amend the dates on which a supplementary
valuation takes effect.

“These changes present
a few drawbacks for
both municipalities and
landowners.”
However, these changes present a few drawbacks for
both municipalities and landowners. The amended
section eight removes the flexibility of municipalities
to determine their own rating category and subcategories. This will appear to be far too prescriptive
an exercise of national powers. Each municipality is
different and each municipality needs to adapt to its
local conditions and its local community.
A second troubling amendment is section 17, through
which it appears that the government is moving to a
system whereby they will attempt to exempt themselves
from liability for rates on public service infrastructure.
There can be little doubt that this amendment will lead
to a loss of income for municipalities down the line.

RESOURCES
Marlon Shevelew and Associates Inc.
www.reimag.co.za