Property rates are taxes on the ownership of property, which are based on the market value of the property, and used to fund various services provided by the municipality in your area.

New Municipal Property Rates Act

A new Property Rates Act is now set to come in which will determine the rates for 2007/2008. As a result, new valuations are needed to determine these rates, which come into affect in July next year.

The municipal value of your property is worked out by considering its market value including land and improvements, at the date of valuation.

The act determines that properties have to be re-valued every four years and that the improved value of the property would be the basis of your rate calculations.

Valuations are done in person by officials, along with other systems and techniques, including aerial photography and computer-assisted mass appraisal systems, for areas where there isn?t adequate market data.

Once your property has been assessed, you can examine your assessment and appeal against it if you feel that it is unreasonable.

Be informed; stand your ground

You need to be well-informed about the provisions of the act, including the provisions on your rights and recourse regarding municipal rates.

The main changes introduced by the new act are that a fixed residential property tax rate will in future be used and that the standard rebate previously used will fall away.

Municipalities rates will only be finalised once the proposed budgets for the next financial year are completed (end 2006).

The act determines that residential property-owners must be afforded the opportunity first of all to review the information currently being collected about the size of houses, the size of land, the number of bedrooms etc.

The act does make provision for a council to set out criteria for exemptions, reductions and rebates based on income levels and other criteria in its rates policy, and specifies that such policies must also be made available for public comment and input.

Lobby councillors

"While homeowners can do little else but lobby their councillors about the level at which rates are to be levied or the local rates policies, they have the right to review and challenge the valuations of their individual properties," says Llewellyn Louw, chief valuer at Rode & Associates property valuers and economists, who served for a number of years as a municipal valuer for the City of Cape Town.

To ensure you do not pay more than you need to, there are a couple of things you need to know: one is that city and town councils must give property owners at least 30 days from the time that the completed valuation roll for a municipal area is published to review ? and object to ? the data on record for their respective properties at public venues.

The publication and display of the rolls must be announced in a local newspaper once a week during the two weeks before publication and display.

The three major city councils: Johannesburg, Cape Town and Durban have all indicated that data lists will be physically displayed at venues in various municipal regions, and made available online.

The three main city councils are aiming to have all the valuation data available for viewing by February 2007.

Where to hand in your objections

If you're unhappy about your levy, objections can be handed to the municipal valuer involved. If the valuer accepts the objection, an adjustment will be made, unless the adjustment is more than 10 percent down or up, in which case the objection will be referred to an appeals board.

An objector can also lodge an appeal with the appeals board if she or he is not satisfied with the decision of the municipal valuer.

Be aware that objective physical data (physical appearance of your house), as well as subjective environmental data (like where you live or what kind of a view you have for example), are used in the valuations and that appeals for adjustments to valuations could be based on either, or both.

You should also ask for the sales data the municipal valuer used for the area and check it against the prices of the last properties sold in the area.

This information is provided by The Property Magazine.