How are my municipal rates and taxes determined?

Ever wondered how the rates and taxes on your house are calculated and why your rates and taxes seem so much higher than that of your colleague living across town? Property rates and taxes are calculated with reference to the municipal valuation thereof, which valuation is based on the market value of the property and is periodically updated with residents provided the opportunity of commenting on or raising objections to municipal valuations if they believe these have not been fairly or correctly determined.

The General Valuation roll for the financial years 2013-2017 was published in 2013 by the various municipalities for inspection with notice of such publication generally being heralded in the local press and websites of the municipalities. The intent of such inspection is to provide property owners the opportunity of checking the municipal valuation of their respective properties to determine whether these are fairly reflected. Importantly, it is the owner’s responsibility to check these municipal valuations, and if not satisfied with the valuation, to submit an objection within the prescribed timeframes of each municipality in order for the property to be considered for re-evaluation. 

The official objection period for many municipalities ended on 30 April 2013, although exact dates should be verified with each municipality. If you have not received an official notice of your valuation by ordinary mail to the postal address used by your municipality for billing, do not make the mistake of thinking that your property may not have been re-valued.

Municipal property rates are set by the individual municipal councils and a register of all rateable properties must be kept by municipalities. All properties are valued at the same date of valuation to ensure that rates are levied fairly with different levy rates for the following different categories of properties being allowed:

  1. use of the property;
  2. permitted use of the property; or
  3. geographical area in which the property is situated.

The valuation roll must lie open for inspection by the public during office hours at the local or metropolitan municipality. In cases where the municipality has an official website, the register must also be displayed on that website.

The valuation roll must reflect the particulars of each property, the registered description or other description of the property, the category of the property (as stated above), the physical address of the property, the extent of the property, the name of the owner and the market value if the property was valued.

If you are not satisfied with any of the information contained in the Valuation Roll or if any information is omitted, an objection must be lodged before the closing date for objections. Each local or metropolitan municipality has prescribed forms available at their offices for lodging an objection and in most cases the forms can be downloaded from the municipalities’ website. These forms should be filled out stating the reasons for the objection accompanied by any supporting documents, such as sworn valuations of your property. An attorney or property specialist can assist with these supporting documents.

Each objection is handled as a separate objection and must be submitted separately on the prescribed forms, even if it pertains to the same property. Objections should however be in relation to a specific individual property and not against the valuation roll as such.

An objection could not be considered if:

  • The objection form is incomplete or not submitted on the official objection forms;
  • The objection is submitted outside the prescribed timeframe;  or
  • Multiple objections are submitted on the same objection form.

If submitting an objection, ensure that you obtain a reference number/acknowledgement letter or receipt for all objections submitted. The Municipal Valuator will consider your objection and if needed amend the valuation roll accordingly. You must be notified in writing of any decision taken and if the valuation is adjusted by more than 10%, the Municipal Valuator must state the reasons for such adjustment. You may lodge an appeal within 30 days of receiving the written notice from the Municipal Valuator.

The new rates become payable from the start of the financial year of the relevant municipality or from the date on which the municipality’s annual budget is approved by the Provincial Executive.

Municipalities may have different policies on the amounts payable while an objection is still pending. For certainty contact your local Municipality to confirm what their requirements are in each case.

It is required by law that the Municipality correct wrong valuations upon finalising objections and refund the objector. Take note that where the property was undervalued, the ratepayer could be required to pay the additional outstanding rates immediately, with interest, to the Municipality.

The Municipal Property Rates Act in terms of which the municipal valuations are conducted is available on http://www.info.gov.za/acts/2004/a6-04. Each metropolitan or local municipality must have contact details available on their official websites for specific persons dealing with the Valuation Roll. If you are unsure of who to contact, which prescribed forms to complete, determine if you have a valid objection or lodge an objection with supporting documents, contact your local or metropolitan municipality or obtain the assistance of a property specialist. Failure to correct the valuation of your property may result in higher rates and taxes being paid, than is necessary.

April 25, 2013
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